Working self employed via CIS

[MetalMonkey]

Anybody do this? What are the pitfalls to look out for?
I've looked into it and it seems quite straightforward on the surface, but I wondered if anybody had any personal experience.

An opportunity has come up to pick some hours up, but they pay via CIS.
I'm already registered as self employed, so I can add on CIS. However, it is only a week's contract and I'm unlikely to work through this scheme again - so it is probably not worth it if it is going to be a hassle being registered.

I'm curious to know peoples experiences with this.

 

[eLuSiVeMiTe]

Few people I work for pay me via cis.

Only difference for me. I add a UTR and national insurance number to the invoice. Labour taxed at source. Materials paid in full. I receive statements of deductions and declare them on my tax return.

 

[Kayos]

It is worth being registered so they only take 20% otherwise it's 30.

I remember the days of getting the actual little CIS voucher the prove the tax had been paid

 

[roblane65]

If working for other contractors on the 20% deduction they supposed to issue you some sort of formal paperwork to show the amount of tax stopped in that month , otherwise you have no proof for the tax man if they don't pay it in ......so beware I have had to chase this on a few occasions . I well remember the voucher book for cis , no wonder they wanted stopped as contractors weren't putting the tax aside and when it came to pay they didn't have

 

[S-Rail]

Anybody do this? What are the pitfalls to look out for?
I've looked into it and it seems quite straightforward on the surface, but I wondered if anybody had any personal experience.

An opportunity has come up to pick some hours up, but they pay via CIS.
I'm already registered as self employed, so I can add on CIS. However, it is only a week's contract and I'm unlikely to work through this scheme again - so it is probably not worth it if it is going to be a hassle being registered.

I'm curious to know peoples experiences with this.

I do a reasonable amount , and to be fair I like it , I’ve had years where I get a reasonable amount of money back come return time .

Originally they taxed your whole invoice , 20% , and now it is labour only at 20% and your materials are paid in full .

There are certain rules , as to prove your are subcontracting , ie you need to provide some materials here and there as to prove your employer aren’t just avoiding taking on payee .

Think of it as your tax is already paid and then some , as it doesn’t account for your personal expenses, so normally you will see a return wether it’s a fiver or several grand .

Just keep good records , and make sure you get a receipt , proof of deductions as I had one chap deduct money , gave me several shifty statements , and I got pulled up by my accountant saying it didn’t look right . Contacted inland revenue and yep , he had been pocketing the money . It was a mess and to be fair inland revenue were okay with me and through the book at him .

And , I still have my original CIS card from 2003 , when they issued them .

 

[MetalMonkey]

There are certain rules , as to prove your are subcontracting , ie you need to provide some materials here and there as to prove your employer aren’t just avoiding taking on payee .

This is something that has been concerning me with it to be honest - the contract is for labour only - no materials.
I'm getting the vibe it might be a bit of a PAYE dodge.

 

[S-Rail]

This is something that has been concerning me with it to be honest - the contract is for labour only - no materials.
I'm getting the vibe it might be a bit of a PAYE dodge.

It may be best to speak to an accountant as they will be able to inform you of the exacts .

For me , as far as I understand , correct me if wrong , I can only work for a max of 3 months at a max , on the same contract / job , but , a large job can be broken in to several smaller contracts , so if you were building a house , you can break it into phases . Or go away for a week or two and work elsewhere to break it up .

It’s not simple , but if it’s an extra on the side of another job , you shouldn’t have to much of an issue , with or without materials .

Paying you CIS / Sub is easier for employers , as they don’t need to deal with the taxes./ insurances etc . But if it’s not full time , I wouldn’t worry too much .

As said , speak to an accountant , most do 30 minutes for free , what ever you do , just keep a good set of accounts / paper trail and you’ll be all good . It’s when people chance it there is a problem .

 

[8ob]

This is something that has been concerning me with it to be honest - the contract is for labour only - no materials.
I'm getting the vibe it might be a bit of a PAYE dodge.

You did mention you were doing this to “pick up some hours”, that would indicate you work elsewhere and this is a bit of a fill in. That is perfectly acceptable under the cis scheme and not really a paye dodge.

Bob

 

[Craig-SM]

Make sure you’re registered for CIS otherwise you’ll have 30% instead of 20% deducted from your labour charges. Make sure you get a CIS statement for each month you receive payment with CIS deducted.
If you’re VAT registered you will also be subject to Domestic Reverse Charges

Other than that as a subcontractor the only snag is waiting until you submit your tax return to account for the taxes deducted.

What you must do as a Construction Industry Scheme (CIS) subcontractor

What subcontractors in the building industry must do under the Construction Industry Scheme - registering, record keeping, applying for gross payment status and reporting business changes

www.gov.uk

 

[mike os]

Do you still have to do a monthly return even if you don't use cis that month?

If you fo its not worth it for a weeks work

 

[Craig-SM]

Do you still have to do a monthly return even if you don't use cis that month?

If you fo its not worth it for a weeks work

only if you’re the contractor

 

[mike os]

only if you’re the contractor

Ah ok, I was always the contractor

 

[roofman]

It is worth being registered so they only take 20% otherwise it's 30.

I remember the days of getting the actual little CIS voucher the prove the tax had been paid

I can go back further than that..remember the SC60

 

[brightspark]

I can go back further than that..remember the SC60

same here

 

[Kayos]

I can go back further than that..remember the SC60

Fortunately I'm not that old

 

[S-Rail]

Fortunately I'm not that old

It always amazed me the quality of the pic on the Card , it was just a blacked out silloute on green plastic ..

 

[roofman]

Fortunately I'm not that old

But you will be soon..too soon