CIS - Help

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monkeypuzzle47
monkeypuzzle47 Registered Posts: 134 Dedicated contributor 🦉
i have a friend who is a landscape gardener and he invoices his boss and his boss pays him less tax (i believe). He is being paid through the CIS scheme. Does he need Self Assessment? can anyone help.

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  • farmergiles
    farmergiles Registered Posts: 1,693 Beyond epic contributor 🧙‍♂️
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    If he is being paid through the CIS scheme, then yes, he needs to do an S/A return so that he can reclaim any overpaid tax. Suggest he looks for an accountant or accounting technician with CIS experience. Make sure he keeps his monthly CIS statements because the revenue will no longer supply details of clients deductions(capture lists)
  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘
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    Monkey

    From what you say your friend appears to be self employed.

    However, if he has not registered as such and not been issued with a UTR number then I find it difficult to see how the contractor is making CIS deductions.

    To enable deductions to be made a contractor has to 'verify' a subbie and to do this he needs to know the subbies UTR

    Poodle
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    If he is working for one contractor all the time, then he should be employed. Check this out before you take this any further. The HMRC website has a special page to check out employment status in the construction industry.

    If he is self-employed, then he will be paid under the CIS scheme, receiving CIS payment statements each month. At the end of the year he will then have accounts and a Tax Return to complete. Any tax underpaid will then have to be paid and any overpayment will be refunded.

    Check out the HMRC website for all the details - there is loads of information on the Construction Industry Scheme.
  • farmergiles
    farmergiles Registered Posts: 1,693 Beyond epic contributor 🧙‍♂️
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    TC, that is not necessarily true. If he maintains a profit and loss account and is able (in theory) to supply a substitute for his job if he is ill or on holiday then he can still be classed as self employed. He MUST have a contract in place stating these facts.
    That is my understanding and is something that is applied in the practice I work for.
  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
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    The CIS scheme is very strict on the employed/self-employed issue and as far as I can see this client works only for one person.
  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘
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    He is being paid through the CIS scheme. Does he need Self Assessment? can anyone help.

    CIS rules or not, it is not up to the subbie in this situation.

    Monkey you could point out the rules to your friend and tell him that he may be an employee and not self employed and as such he will be missing out on the benefits of say, paid holiday, sick pay etc. etc., with his boss possibly operating the wrong scheme.

    And the onus of responsibility on that lies well and truly with the contractor/employer.

    However, if he is recieving his pay under CIS then he must register as self employed for self assessment purposes.


    Poodle
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