Hi, I have a client with a LTD company which is cis registered. He is the director. His company invoices the recruitment agency with 20% cis deducted. He is the only person in the company and as director wud He be classed as an employee paying PAYE and NIC. How would He reclaim the cis paid by the company. Does he need to submit monthly payroll and how do I set Iagainst the cis paid.
Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.
Please add your first name, rather than just initials so that appears on your posts each time (profile, signature)
Some of these are pretty basic questions, does your PII cover your for answering such if you have no experience?
Why is CIS being deducted by a recruitment company?
You say CIS is deducted by the company....please expand. What is the nature of his trade?
I assume the Director is a participator.
__________________
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
Hi Chester,
I work for myself and have done the AAT course.
In regards to the CIS. He used to be under the umbrella scheme but recently switched.
HMRC adviced that he could not be gross payment.
The Ltd company invoices the agency and the agency pays the 20% cis deduction under the companyâs UTR number. There are no other subcontractors in the company.
He is the director of the company and therefore classed as an employer. He has been withdrawing from his business to his personal account but had not paid any PAYE/nic since July 17.
He works as an electrian on commercial sites.
Thanks Emilie
Work for myself as well as employed as an accounts assistant.
Bookkeeper
Payroll
Vat returns
Monthly and year end procedures.
Level 3 technician of AAT.
The Agency recruit for the commercial companies he does wok for.
His dla is approx £30k
Iv just received all his stuff and heâs not clued up about any of it or wats been going on.
Work for myself as well as employed as an accounts assistant.
Bookkeeper
Payroll
Vat returns
Monthly and year end procedures.
Level 3 technician of AAT.
The Agency recruit for the commercial companies he does wok for.
His dla is approx £30k
Iv just received all his stuff and heâs not clued up about any of it or wats been going on.
Regarding licence/Mlr Iâm not registered. Should I do this.
Up to trial balance and taking to accountants to be signed off.
IR35 - he also does self employed work under his own utr number.
See the post just below yours (re payroll) as I've just mentioned licences and MLR to someone else on that. Do not do ANYTHING until you have that and PII cover for the reasons mentioned in that other post.
Re you specifically, as opposed to the other new lady, as you have passed level3, you should be able to get the AATQB licence, given you have some experience via your job. That licence which will include MLR, but you have to have passed a couple of extra tests. I can send you the links icon, plus the application form link if you can't find it on the AAt website. You cannot go beyond the list of allowable areas otherwise the AAT can throw you out/fine you etc.
You need to get an Accountant on board for this guy and fast! This guy has got major issues, not least his DLA. I would recommend you get the Accountant to deal with the CIS claim backs as this is beyond the AATQB licence/TB, but obviously you can assist with his bookkeeping.
Sorry, don't want to be the bearer of doom, but it is to protect you until you have the relevant MAAT (full level4) licence.
edited to correct a typo
-- Edited by Cheshire on Thursday 12th of April 2018 11:26:19 PM
__________________
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
Hi Chester apologies I do have the level 4 accounting qualification, just checked my certificates.
This query has been playing over in my mind all night.,
Is it possible that the Ltd company is invoicing the agency for his services and deducting cis payments at source which relate to him.
The only reason I ask that is the cis payments must relate to someone be hes the only person in the company.
This is all sounding a bit confused. Have you come across CIS before?
As a limited company it is the company who is liable for CIS, not him personally. Putting aside the rather dodgy IR35 stuff (is he working for one sole agency only) what the company should be doing is invoicing for the work carried out in full.
It is then up to the agency to verify the company & deduct at the appropriate rate.
Who is filing all the company returns?
As for him as an individual Unless the company is exempt from running PAYE (all employees earn under the Lower Earnings Level) payroll should be run each month. (Iâm guessing he mostly pays himself dividends). He really needs an accountants input on this if he is. You canât treat a Ltd Company like a personal bank account.
Hi Emilie
If you have full level 4 then you can apply for MAAT - get that under your belt, but even if you dont want their licence then you must get the your MLR and PII out before going ANY further.
We cannot be seen to be assisting someone in breaking the law, so further advice can follow once this has been achieved.
Are you now saying that you are acting as his Accountant and will be doing the year end/self assessment, CT, CIS and S455 issues? Just so we know how to respond idc.
__________________
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
Only just noticed the bit about the directors loan account. You are saying it contains £30k or is it overdrawn?
I work a lot with CIS an an employee of a gross status limited company that engages and pays sub-contractorsand I also deal with payroll but the other stuff goes beyond my experience/comfortable level of knowledge. Sounds to me like he needs a good accountant on board.
-- Edited by pictures on Friday 13th of April 2018 02:37:18 PM
He was under the assumption that as th cis was been paid that was his PAYE/nic.
Iv come to the conclusion:
1. Set his company up as an employer
2. Am I able to file late submission for April 17/18 and claim cis against PAYE/nic due.
3. Is it possible to use basic tools RTI to offset the csi against PAYE/nic
4. Or would I be best to claim back all the cis that he has paid and for him to sort his tax out on his tax return as he was also carrying self employed work up til his company started.
Hi Julie Im afraid Emilie cannot act as his Accountant nor Bookkeepers just yet until she has her MLR cover (or will be breaking the law!)
Well quite. I think this "client" needs to pay for the services of an accountant experienced in CIS. It seems to be more and more of a common thing where these agenices, service companies or whatever they call themselves are telling subbies to go become ltd companies as though it is the easiest thing in the world. They then (naturally I guess for a one man band electrician) want to avoid paying for the services of qualified professionals. Its the equivalent of me getting a non Gas Safe engineer to service my boiler.
-- Edited by pictures on Friday 13th of April 2018 04:11:29 PM
