Sub Contracting Non-CIS Deductions.

[Mark Wileman]

Evening,

 

I just sent my first sub-contracting invoice and my employer has asked for my UTR so they can deduct my taxes. None of the work on the invoice was Construction related therefore I assumed I would be getting gross payment. I've invoiced CIS work separately.

 

Is my employer getting their wires crossed or are there other situations where a sub-contractor will have their deductions made by the employer?

 

It's not the end of the world, it means i nice tax rebate, but I'd rather track/manage my own taxes.

 

Thanks.

[Gary Prentice]

12 minutes ago, wiley said:

Is my employer getting their wires crossed or are there other situations where a sub-contractor will have their deductions made by the employer?

Not been self-employed for many years and I don't deal too much with the invoicing side of things much at work, but I don't think so.

[Inoff the Red]

The definition of services deemed to be construction related is quite broad and it really does depend on what you were doing. Tree planting and landscaping as part of forestry management is not a construction activity. Tree planting and landscaping to prepare a site for construction is a construction activity.  

 

Guidance is given here:-

https://www.gov.uk/government/publications/construction-industry-scheme-cis-340/construction-industry-scheme-a-guide-for-contractors-and-subcontractors-cis-340#appb

 

Look at clause 2.18 (covering construction activities) and 2.19 ( activities that are not construction activities) as well as appendix B (detailed listing of what constitutes construction activities as defined in S74 , Finance Act 2008) although it is probably worth reading the whole thing.

 

[Mark Wileman]

Yeah, I'm happy with CIS. This work was all domestic tree work, nothing to do with construction. I have done some CIS work for this employer in the past (site clearance), and have invoiced it as such.

[Burgess]

We do some park maintenance (no tree work) and it comes under CIS. Never had an issue and accountant is okay with it.

Edited November 20, 2017 by Burgess

[kevinjohnsonmbe]

3 hours ago, wiley said:

Evening,

 

I just sent my first sub-contracting invoice and my employer has asked for my UTR so they can deduct my taxes. None of the work on the invoice was Construction related therefore I assumed I would be getting gross payment. I've invoiced CIS work separately.

 

Is my employer getting their wires crossed or are there other situations where a sub-contractor will have their deductions made by the employer?

 

It's not the end of the world, it means i nice tax rebate, but I'd rather track/manage my own taxes.

 

Thanks.

Couple of questions to clarify....

 

If you are a sub contractor you wouldn't have an 'employer' you'd have a prime contractor (to whom you provide specified services) or the person issuing the contract.

 

Are they / you confused about why they have asked for UTR?  It would be quite normal for them to ask for it as part of their due diligence check that you are submitting a tax return so they can defend against a claim against them for tax you might 'forget' to declare.

 

Did they actually say it was for the purpose of CIS deductions or have you assumed that?

 

Doesn't sound like work CIS from what you describe

 

 

[Mark Wileman]

27 minutes ago, kevinjohnsonmbe said:

Did they actually say it was for the purpose of CIS deductions or have you assumed that?

Yeah, they said it was so they could deduct my tax and pay it to HMRC. I said that the work wasn't construction related and they said that all contractors get their tax deducted.

 

And sorry yes, Prime Contractor, still getting used to the lingo!

 

The only reason I can see for them having to apply CIS to my case is if the company turns over £1 million in construction related activities, which they don't, they do some construction related activities (land clearance) but I was planning on invoicing the CIS stuff separately.

 

What would be the best way to proceed, I've already had the "This isn't CIS applicable" comeback turned away?

 

Thanks as always Kevin, you are a foundation of knowledge! 

 

 

[kevinjohnsonmbe]

11 minutes ago, wiley said:

Yeah, they said it was so they could deduct my tax and pay it to HMRC. I said that the work wasn't construction related and they said that all contractors get their tax deducted.

 

And sorry yes, Prime Contractor, still getting used to the lingo!

 

The only reason I can see for them having to apply CIS to my case is if the company turns over £1 million in construction related activities, which they don't, they do some construction related activities (land clearance) but I was planning on invoicing the CIS stuff separately.

 

What would be the best way to proceed, I've already had the "This isn't CIS applicable" comeback turned away?

 

Thanks as always Kevin, you are a foundation of knowledge! 

 

 

 I'm just self-taught from the university of hard knocks!  Inofthered is the expert and it's good he's back on the manor!!  

 

Sounds a bit iffy, if they're taking CIS deductions where maybe they shouldn't be.  Kind of depends what your relationship with them is (or what you want it to be in the future.) 

 

If it was me, and I was sure CIS shouldn't be deducted, after checking with CIS helpline, I'd offer them the opportunity to put their case to small claims court after giving notice of action for recovery of unpaid invoices...  But I'm sure they will be subtler ways of resolving it!!   

 

 

[roseyweb]

Pretty standard to have cis deductions I got my knickers in a twist about it the first time it happened. 

just ask the tax man to become gross registered then there's no dramas,

you can also claim it back when you do your Paye submissions 

[inthewoods]

Make sure you get a cis receipt or you could be paying it twice!