Scam???

[maybelateron]

7 hours ago, doobin said:

There's a pretty sensible way around it- register for CIS 'gross contractor' status. Otherwise known as bona fide contractor.

 

https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/gross-payment-status

 

"You must show HM Revenue and Customs (HMRC) that your business passes some tests. You’ll need to show that:

• you’ve paid your tax and National Insurance on time in the past
• your business does construction work (or provides labour for it) in the UK
• your business is run through a bank account

HMRC will look at your turnover for the last 12 months. Ignoring VAT and the cost of materials, your turnover must be at least:

• £30,000 if you’re a sole trader
• £30,000 for each partner in a partnership, or at least £100,000 for the whole partnership
• £30,000 for each director of a company, or at least £100,000 for the whole company"

Sounds reasonable. The whole point of CIS is to catch out those who say,  "yeah, I'm self employed mate!" and have never filed a tax return in their life.

Agreed entirely. I contacted HMRC re  this issue on 2016 and they told me I could apply to be exempt from this CIS deduction of tax at their discretion. I applied and they approved me to be exempt, or "gross contractor" status. When I have submitted an invoice to a construction firm or similar since then I do as HMRC told me:

Tell the client/main contractor that they need to contact HMRC to verify your status with respect to the CIS scheme, give them your name (Oh really?!), NI number and UTR (unique taxpayer reference). If they don't do this they are potentially in trouble with HMRC.

In reality I only pursued this to make my accounting easier with my computer software. At the end of it all HMRC will be having the tax, but it just made my electronic book keeping easier by having invoices paid in full.

If it helps any one I can post a copy of the letter I had back from HMRC in response to my query.

[rich crowther]

That’s ok halfway thru the year, at the start of the tax year you’ll be taxed at 30%