Is it possible to be a self employed builder not under the CIS scheme. I have just registered a builder as self employed who will be invoicing customers direct despite working as part of a team but HMRC have automatically registered him under CIS.
I'd appreciate any help on this
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Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Your builder will only be CIS if he works for a contractor at any point, and the contractor will ask for his UTR and stop tax at 20%.
All other work where he invoices direct will not be CIS, and any profit will be taxable on his SA.
However, when you say working as part of a team, is it the same team charging each customer individually? It's possible that this could be viewed as being a contractor (collectively) and come under CIS rules.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Thanks for your reply. I appreciate that in the future it is possible that this builder could work for a contractor and could therefore fall under CIS rules. Currently though it is individual jobs for seperate customers which would be invoiced individually as may only be one or two builders working on each job using own tools etc.
I was just surprised that HMRC automatically enrolled him for CIS when technically I just reported him as self employed. Is this the norm?
Thanks
Valerie
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Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I'm not sure to be honest Valerie, but it could be that being a builder they have automatically including him in CIS as well. It's not a biggie, if his customer is the end user, he can sort out the tax element on his SA.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Everyone in construction that isn't contractually paid needs a UTR, it is the employers responsibility to deduct the tax from the invoice. If your client doesn't work for a CiS registered employer it will not effect him/her. Should he not have a UTR and gets a job with a CiS employer they will have to deduct 30% of the invoice.
Everyone in construction that isn't contractually paid needs a UTR, it is the employers responsibility to deduct the tax from the invoice. If your client doesn't work for a CiS registered employer it will not effect him/her. Should he not have a UTR and gets a job with a CiS employer they will have to deduct 30% of the invoice.
I think the word 'employer' could potentially confuse in this scenario, especially for those not used to the CIS scheme. Suggest its read as contractor /subcontractor.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
