Subcontracting Advice Needed Please

[New Boy]

Hi

 

Could anyone who uses subcontractors to assist day to day work please offer some advice as to the normal process in terms of payments made to them and how to subtract for tax purposes etc, i am currently not at this stage but as considering doing so and therefore could do with a heads up please.

 

Should i expect to hire someone (Climber or Ground) for a few days work and then they invoice me prior to paying them, also should I be deducting 20%-30% as per the CIS within the HMRC guidelines?

 

Thanks

 

New Boy

[RobRainford]

Subbies send us an invoice with their total costs. We send them what it says on the invoice. They work out their own tax.

 

CIS is for construction and I'm pretty sure people wouldn't be happy if you took 30% off them just like that!

[doobin]

As above. Decent subbies are worth their weight in gold, they will crack on whatever the job or weather and treat your job and customers as their own.

 

Be wary of 'labour only' subbies who just turn up and provide labour for a day- it never hurts to ask for a UTR from them to confirm that they are really self employed. Otherwise I believe HMRC may come after you for their tax if they find out.

 

I forget his name but there's a chap on here who is a wealth of info on this sort of thing, hopefully he sees this thread

[Kev Stephenson]

I pay subbies either at the end of the day/job or the end of each week if it's a longer job. If you can't afford to pay the subbie before you get paid from the job then the job is probably too big for you at the moment.

 

You need to do all that is reasonably practicable to ensure the subbie is registered for self employment and will complete their own tax return or you will be liable for any tax the HMRC feels should have been paid from your work (keep records of your check incase HMRC contact you). Either ensure the subbie has been self employed for a while or provides you with a UTR (unique tax reference) number which shows they are registered. You can check with HMRC and ask if the subbie is recorded as paying tax.

 

HMRC can ask you to deduct tax at source if the subbie is brand new to self employment or has a history of tax avoidance. If this happens you must record it on the pay receipt provided to the subbie and also report it on RTI (HMRC PAYE system) or when you do your tax return. You will be told what % to deduct.

 

I have a sheet that I ask subbies to fill in on the first work day with their name/address/emergency contact number and a declaration to sign which states I will be paying them gross and by signing the form they accept they are liable for their own tax.

[New Boy]

Thanks guys for clearing this up and your sound advice.

 

All the best

[CJM]

Im a subbie and I send companies I've done work for an invoice via email with my bank details on with a break down like climbing kit, saws ect then the total amount owed at the bottom. Usually I get paid within 7 days not all the time though (biggest issue). Then I pay my own tax and NI once I've been paid.