CIS confusion

Discussion in 'Other Trades Talk' started by Zh123, May 7, 2022.

  1. Zh123

    Zh123 Member

    Hello, I’m starting a role as a labourer with a bricklayer in a little over a week. I’ll be classed as self employed but I’ll be working with the bricky 99% of the time. He said that I can pay tax nearly as that’s what he does as it’s easier.

    Last night I looked on the Gov site and it states to qualify for for ‘gross payment’ status as a subcontractor which is what I’d be classed as under CIS I have to earn over 30,000.

    The other option which is seeming like what I have to do is the contractor (bricky) makes deductions to my pay and sends it to HMRC which count as advance payments to my tax and NI. I just checked the gov site to check this under what a contractor must do under CIS.

    I messaged the bricky and he seems to think I can pay mine yearly even tho it seems I don’t qualify. He needs my UTR number when we start. All of this has my mind boggled
     
  2. kitfit1

    kitfit1 Screwfix Select

    To get a UTR number you need to be registered with HMRC as a sole trader and this is the first thing you should do.
    Once registered you then become self employed.
    You can then register under the CIS then the brickie will HAVE to make deductions when he pays you. Those deductions are in effect advanced payments to HMRC, you will still have to fill in a self assessment form every year but your advanced payments will be deducted from your total tax and NI bill.
    I will make the following observation though. Subcontracting for the same person 99% of the time is viewed very dimly by HMRC as you are really "employed" not "self employed". Expect a lot of questions from HMRC after your first tax return.
     
    Last edited: May 7, 2022
    Kingscurate and WillyEckerslike like this.
  3. Zh123

    Zh123 Member

    Well the bricky said he doesn’t want to have me as an employee because of having to pay holiday and sick pay basically. And said it’s a lot easier to have someone self employed. He mentioned if he’s ever off sick or on holiday he knows firms who I’d work for whilst he’s off. I did ask him to take me as an employee but he seemed adamant that been self employed is the way to go. Not sure what to do. It’s my first fulltime job offer after 9 months applying for labouring jobs. I’m eager to start but I want it to be legal and right with HMRC.
     
  4. Zh123

    Zh123 Member

    Also by law is someone is an employee they have to do the following:
    • Run payroll and provide a payslip;
    • Pay employers National Insurance at 13.8% of gross salary;
    • Provide holiday pay;
    • Give statutory benefits such as maternity leave and sick pay;
    • Protect employees against any discrimination relating to gender, sexual orientation religion and disability;
    • Make sure your health and safety is protected;
    • Contribute National Insurance on your behalf so you can access state benefits like child benefit or the state pension.

    • But if I’m self employed the bricky can avoid nearly all of these. Should I just find something else???
     
  5. Ind spark

    Ind spark Screwfix Select

    I think you'll find it hard to find a 1 man band to take you on as an official employee.
    I might be wrong tho.
     
  6. Resmond

    Resmond Active Member

    It’s standard, unless you work for a big firm you’re gonna be self employed. I subbed for the same company for almost 10 years, only ever did a few other jobs on the side. Never had any questions from hmrc about that.. or anything else. tbh depending on how generous this brickie is starting out as a labourer hmrc arnt even gonna look at your tax return..
    Just get your utr number give it too him and he’ll have to make your cis deductions that you get back part of at the end of the year
     
  7. Zh123

    Zh123 Member

    So what are my options here? My other half’s dad is a builder and he has 1 labourer classed as an official employee. The bricky has said he would have to pay more NI and basically can do more cash in hand stuff to avoid the tax man when self employed.

    Feel like I’ve got two options really either find somewhere else which will be another long and painful road.

    Or take the job and get done in by HMRC
     
  8. Zh123

    Zh123 Member

    How does the CIS deductions work. How much does it take off my tax and NI? Feel like I need to be an accountant to be in this industry lol
     
  9. Resmond

    Resmond Active Member

    20% off every payment (30%if you don’t have a utr number)

    You’ll be in the basic rate 20%tax bracket and ni is something like 13% above a certain amount (not really sure about ni, seems to always be different and more than i thought itd be).. but then you have the tax free allowance of about 12.5k which means you get back some of your cis payments at the end of the year usually around a 2k rebate.


    Basically if it’s something you want to do then take the job and start worrying about hmrc 11pm jan 31 2024

    but do get that utr number sorted
     
  10. Zh123

    Zh123 Member

    Thankyou, I just want to make sure I don’t get done in by HMRC. Obviously very new to all this. It’s given me a right migraine. And just to clarify can I or can’t I work for the same place and be classed as self employed? And how would it work if I worked for somewhere else on the side would they have to pay CIS payments too?
     
  11. Zh123

    Zh123 Member

    And I sent off for my UTR number last night.
     
  12. Resmond

    Resmond Active Member

    You can
    They say hmrc don’t look to fond of it but thats the way it is in construction, like i said different if working for a big firm..
    You can work for someone else they will pay your cis too using the same utr number or if you start doing your own jobs down the line you just declare that extra at the end of the year..
    Don’t worry about it, it’s down to the contractor to get it right
     
  13. Zh123

    Zh123 Member

    If for whatever reason a contractor doesn’t pay my CIS it would be them who would get in bother and not me correct?
     
  14. Sneeze

    Sneeze Member

    Look up 'Inside and outside IR35' on your web travels too.
     
  15. Resmond

    Resmond Active Member

    If they’ve signed up to cis with your utr number they’ll have to make regular payments throughout the year, not paying that will be the same as them not paying their tax or vat bill..
    If you’re for some reason getting paid full whack without any deductions then you need to set 20% aside and declare it when you do your tax return, but that’ll only really happen if you do a small job and get paid cash, helping out for a weekend or something
     
  16. Zh123

    Zh123 Member

    I don’t quite understand the IR35
     
  17. Zh123

    Zh123 Member

    The bricky said I’ll start on 80 a day and when I can do mixes and stuff on my own my wage will go up. He wants to give me some progression so won’t be just labouring all the time. I think he wants to show me some bricklaying basics too. But I’ve no idea if the 80 a day is before or after the CIS deduction.
     
  18. Resmond

    Resmond Active Member

    Don’t think it applies unless you work through an agency, and even if you do some agency work on the side you just give them your utr and they sort out your tax deductions
     
  19. Zh123

    Zh123 Member

    I’ll go with the bricky and see what happens. Like you said if he doesn’t pay CIS it’s his issue not mine. He mentioned I could work for this other firm if he’s on holiday or if I want anything else on my off days but they mainly pay cash or just bank transfer and they wouldn’t need my utr apparently. With that I’d just pay the tax end of the year right?
     
  20. Resmond

    Resmond Active Member

    id imagine that’s before tax for someone with no experience, start the work then when you get your first payment if you get 80/day as opposed to 64/day ask him to clarify if he made any deductions.. if he hasn’t and he’s signed up to cis with your utr he’ll soon realise his mistake when hmrc ask him for his first payment of tax he should’ve deducted already
     

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