Construction tax rate. Info needed

[Hodge]

I Have had this in the past, spoke to my accountant who said I am exempt from CIS as not doing construction work even if on a site. I have not been asked again. If I put my bill in and they want 20% of bill which I have paid subbys or employees out of the I would of been screwed. Luckily I got it sorted.

[Hodge]

I Have had this in the past, spoke to my accountant who said I am exempt from CIS as not doing construction work even if on a site. I have not been asked again. If I put my bill in and they want 20% of bill which I have paid subbys or employees out of the I would of been screwed. Luckily I got it sorted.

 

Oh and same as Huck I got a letter off the tax boys saying I'm exempt.

[likeitorlumpit]

break down your bill- most companies don't care how you itemise so put £100 labour, £350 materials

Pay 20% on the labour and either set it against PAYE or reclaim at the end of the year on your tax form. Somehow, I think you will be paying tax this year especially if it carries on like this.

[Dr.Green]

Sound. Il redo invoices and get onto hmrc ASAP. Cheers again folks much appreciated

[Tom D]

I had £1200 taken off an invoice today:001_rolleyes:

 

 

Never mind, I'll get it back soon enough.

[Dr.Green]

Had another look on hmrc. Both these jobs are excluded from cis so emailing website link to both company's with invoices again

But seems my future jobs will be due to there nature, I won't just price off the top off my head eithier, itl be proper pen to paper hourly rate

 

Mine field out there but I'm learning fast

[Inoff the Red]

CIS is the HMRC getting revenge on the construction industry.

In theory it is difficult to argue with the principles behind CIS but unfortunately the way the rules are sometimes applied by HMRC are grossly unfair.

 

If you want to know more about CIS and whether it applies check out the following link.

 

 

HM Revenue & Customs: Deciding whether your work comes within CIS

 

The following is a quote from the HMRC guidance notes

 

"There are some types of work that aren't automatically treated as construction operations, but can be in certain situations. For example, tree planting and landscaping aren't construction operations if they're part of estate management or forestry work. But HMRC would treat them as work that's covered by the CIS if they were done in the course of building a new housing development."

 

So if you are doing work for construction companies, it may be worth registering for CIS. If you register the deduction made would probably be 20% (you may be able to get gross status). Your accountant should be able to advise you on this, but if you want any further info send me a pm.

 

If you don't register and the contractor applies the CIS rules properly, the deduction would be 30%.

 

Its a minefield and an area you don't want to get wrong.

[Inoff the Red]

I had £1200 taken off an invoice today:001_rolleyes:

 

 

Never mind, I'll get it back soon enough.

 

If that was a deduction for CIS I hope you do but I advise caution.

 

HMRC is using tactics that would not be out of place on BBC Rogue Traders to avoid making repayments.

 

I know of a case where a construction company is owed over £100k in respect of CIS deductions but HMRC refused to make a repayment because they claimed they had a query over £150. As a consequence of not getting the repayment, the company defaulted on a vat payment and was then hit by penalties.

 

Yes, I know its stupid and you'll say why didn't HMRC withhold £1k pending resolution of the query. But thats the way they are.

 

I have a catalogue of instances where honest tax payers have been jerked around by HMRC that would give you sleepless nights.

[doobin]

Inoff, what's your link with the Arb world? Your advice on tax is always on topic and interesting and you certainly don't appear to be a spam bot. What gives?

[Notmegov]

That's ridiculous. They're treating you as their little bitch who can't be trusted to pay tax, not as a bona fide sub contractor who may well have genuine overheads as such that he wouldn't pay much tax anyway.

 

Presumably you are not some subby bricky who turns up with nothing but a trowel and takes home a onener in cash, and if not forced to pay at source would have no intention of paying tax. You are a genuine business buying fuel, expensive machines and transport? Or do the council supply everything and you are 'labour only'?

 

If you employ people, then you would presumably need to claim back their tax which had been taken under CIS also?

 

Registering as 'gross contractor' is presumably the best way around this?

 

To tell the truth I like it, most of my contracts for the council are labour only. For me it works I always budget that they will take 20 per cent and it means comes the end of the tax year I get a nice fat rebate.