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Posted: Tue Jun 19, 2012 9:01 pm
by rimexboy
Hi
well i know loads of you on hear work self employed, a close mate of mine has run into problems.
He has been working for a guy who does work for a kitchen company, they pay the guy my mate works for and then my mate invoices the guy he works for and he pays him minuss the 20% tax...
He is ok with all the above so far but the guy is not giving him any remittance advice for his books and he has asked about 7 times over the last few months..
It has got to the point now that my mate has informed the guy he will not work for him untill he pays some outsatanding invoices and also provides the remittance he needs for his company books..
My mate said that any one else he has every worked for gives him a tax advice remittance...
many thanks simon
Posted: Tue Jun 19, 2012 10:38 pm
by Kuts
He probably isn't registered as a contractor, has your mate got an accountant?
I get mine to send an "informative" letter and they soon get the drift if there's a threat of a tax investigation.
Posted: Tue Jun 19, 2012 11:00 pm
by lutonlagerlout
hmm if someone works for us and they supply and fit,they invoice us and we pay the whole amount
however if someone supplies labour only we stop them 20% and supply them with a cis deduction cert once a month (or whenever)
if he is invoicing he should be getting the full wack then paying his own tax
accountant time methinks
LLL
Posted: Tue Jun 19, 2012 11:38 pm
by local patios and driveway
lutonlagerlout wrote:hmm if someone works for us and they supply and fit,they invoice us and we pay the whole amount
however if someone supplies labour only we stop them 20% and supply them with a cis deduction cert once a month (or whenever)
if he is invoicing he should be getting the full wack then paying his own tax
accountant time methinks
LLL
As i understand it, if you work for a contractor any labour is -20% regardless of invoices etc.
Posted: Tue Jun 19, 2012 11:49 pm
by lutonlagerlout
well if a plumber gives us a price of say £4k+vat to fit a heating system then we pay him that amount on receipt of an invoice
however if we supply the boiler flue rads etc and he just comes in every day for 5 days then we pay him£750 minus his 20% cis deduction
+ £600 + his cis voucher
its totally legit as our accountant advises us on this sort of stuff all the time
I know a lot of builders try and stop everyone 20% but they are misinformed
LLL
Posted: Wed Jun 20, 2012 5:43 am
by msh paving
If your in the CIS system,the contractor should take tax from the labour element off all invoice's,there is no exceptions,even if you tell them there is £100 labour on a £10000 job,I have had this argument with the trading division off norfolk county councill as they take CIS TAX,but at the end off the day there is no problem as it all comes from your tax bill anyway, MSH 
Posted: Wed Jun 20, 2012 7:15 am
by lutonlagerlout
it all seems rather murky but until
the accountant tells me otherwise i shall carry on as is
what it is to be an unpaid tax collector eh?
LLL
Posted: Wed Jun 20, 2012 5:38 pm
by DNgroundworks
Its odd, as i paid around 6k in cis last year and got every penny back?
I struggled like mad to get my cis receipts, in the end i had to call HMRC they told me to write to them, that didnt work so i called them back where they then started an investigation into said company and instantly fined them for not supplying said paperwork.
Needles to say, i shall not be getting any more work of them me thinks!
Posted: Wed Jun 20, 2012 7:51 pm
by Pablo
lutonlagerlout wrote:well if a plumber gives us a price of say £4k+vat to fit a heating system then we pay him that amount on receipt of an invoice
however if we supply the boiler flue rads etc and he just comes in every day for 5 days then we pay him£750 minus his 20% cis deduction
+ £600 + his cis voucher
its totally legit as our accountant advises us on this sort of stuff all the time
I know a lot of builders try and stop everyone 20% but they are misinformed
LLL
Tony that's illegal regardless of what your accountant tells you. All work that can be regarded as a construction based service must be dealt with under CIS regardless if it's priced materials and labour work or labour only. The only way you are legally allowed to pay them the full invoiced amount is if they're registered for gross payment which you can do if your turnover is over £30000 otherwise an invoice must be produced detailing labour and material breakdown and 20% be deducted from it. The only work that's excused is supply only stuff like materials architects and engineers and I think tree work is also excused. I'm registered for gross payment it's so much less hassle and I could never get my head around how you work out the tax when you've had 20% taken at source then you pay your staff and take their tax off them I'm sure that means you've paid twice somehow.
Posted: Wed Jun 20, 2012 8:20 pm
by rimexboy
OMG i have started something here opps sorry chaps...
Right so my mate has invoiced the guy and he has paid minus the 20% tax, so far so good, but he has not sent or given my mate the paperwork to show this, all he has done is pay the invoive with the deductions into his account...
thanks simon
Posted: Wed Jun 20, 2012 8:35 pm
by Pablo
The employer is legally obliged to provide a remittance advice you cannot deduct tax and not provide evidence of it in the same way you must provide a payslip. What I've done in the past is write my own then take it to the contractor and said sign this and write your UTR there that way I was covered my end.
Posted: Wed Jun 20, 2012 9:02 pm
by rimexboy
pablo thanks for that can i ask is UTR your tax return
thanks
Posted: Wed Jun 20, 2012 9:18 pm
by Pablo
Unique Tax Reference everyone on cis gets one whether you're the contactor or the subbie and it's what you use for all correspondence and must be on any remits and invoices. A lot of sites don't let you start until they verify you have one a bit like all the CSR type cards.
Posted: Wed Jun 20, 2012 9:25 pm
by DNgroundworks
Cheers for the info on gross payments pablo, ive just fired off an email to my accounts instructing them to crack on and get this done as i reckon CIS is a bloody nonsense and upsets cash flow for no real reason, i can level with what you are saying about feeling like youve paid twice..
Posted: Wed Jun 20, 2012 9:53 pm
by lutonlagerlout
maybe my accountant explained it a different way but we turned over a fair bit more than 30 k and i am 100% sure most of our subbies do
we do it legit
there is no other way
i actually get stopped cis deductions, then pay paye ,and then pay tax on dividends,also corporation tax and CITB levy which is a liberty
if you ask me
its not in jimmy carr's realm but it pays to be tax efficient
anyone who does their own tax return needs to wake up
i used to work in a 2 and 1 gang
the other brickie and hoddie got approx £1200 rebate
i got £3400 and my accountant at the time charged me £400
we were on a 3 way split
its a no brainer,these guys do accounts for a living
LLL