tax issues, dont get it?

[southcoastboile]

Hopefully someone can explain this to me as I am unsure what I should be doing tax wise.

I am employed and registered as self employed also. I have all my paperwork sorted into files etc but have not had to fill in a tax return yet. I am getting an acountant to sort this out.

The thing I dont get is..........my mate gets lots of work from a letting agent and as he is not gsr he passes the gas stuf on to me. He said that he was told by HMRC that because he gets the work in and gets a 3rd party (me) to do it he needs to have employers liability insurance and that he can either sort out my tax or he can just pay me and let me sort out the tax. I am subcontracting to him so I dont know why he has to have employers liability?

Also if I am doing this do I have to get a CIS card or whatever its called?

Does anyone know the best way to work it? from both our point of views? or if anyone can explain how it works would be good, thanks alot!

 

[Guest123]

I think you need to prove that the gas work is not being subcontracted but merely being given/passed on to you by a friend as he is not qualified to carry it out.

You need to get your accountant involved in this as soon as possible and get him to write to HMRC. They can be a nightmare to deal with sometimes and the quicker that your accountant contacts them, then the easier it will be to resolve this.

 

[southcoastboile]

thing is he takes a cut out of the work and he deals with the letting agents, I have never even been in the office so is that still possible?

Im still waiting for my P45 from my old work which I doubt they will give me. Thats slowing down getting my acounts sorted out

 

[Guest123]

Re: ~~~~~~~~~

I think mate, you need to get an accountant to sort this out in your favour. Good ones are worth their weight in gold and can claim back all sorts of things for you. If you don't you might find yourself with a hefty tax bill/penalty.

First meeting with an accountant is usually free, just explain your predicament to him and listen to his advice.

 

[southcoastboile]

Re: ~~~~~~~~~

I think mate, you need to get an accountant to sort this out in your favour. Good ones are worth their weight in gold and can claim back all sorts of things for you. If you don't you might find yourself with a hefty tax bill/penalty.

First meeting with an accountant is usually free, just explain your predicament to him and listen to his advice.

thanks system

 

[AWheating]

Just make sure you invoice your work, keep all records of payments,costs etc... and pass onto your accountant or do self assessment return. You need PLI 2million, Your mate needs employers insurance beacuse hes employing you as a sub contractor to work for him. Dont worry about his taxes just make sure you keep all paperwork.

If you want to do any CIS work you need to register, if he wants to pay you via CIS then he needs to register as a CIS employer. Either way you will pay the same amount of tax at the end of the year.

 

[southcoastboile]

Just make sure you invoice your work, keep all records of payments,costs etc... and pass onto your accountant or do self assessment return. You need PLI 2million, Your mate needs employers insurance beacuse hes employing you as a sub contractor to work for him. Dont worry about his taxes just make sure you keep all paperwork.

If you want to do any CIS work you need to register, if he wants to pay you via CIS then he needs to register as a CIS employer. Either way you will pay the same amount of tax at the end of the year.

thanks for reply, so if he employs me as a subie does that mean I dont have to get a CIS card or I do? also will he have to pay like 30% tax if he employes me as a subbie?

 

[Nostrum]

Be careful how much you do as well, if HMRC see you are doing regular work for your mate they may decide that you are a PAYE employee although this would be nearly every day of the week type regular. I don't think you can avoid CIS in this circumstance, probably easier for you, but a bit more work for your mate as he will have to deduct your tax before paying you.

I asked a similar question at HMRC a few weeks ago and the response I got was that if you are using somebody on a regular basis, you need to register with the CIS scheme, once in a while and you can get away with just sending in an invoice.

 

[AWheating]

he can just pay you and then you pay the tax through your accounts. He will pay tax on his invoice to the letting agent.

If you go the CIS route he will pay you your full invoiced amount minus 20% which he payes to the IR. Then when you do your taxes you can try to claim back some of that 20% if possible at the end of the year.

you dont have to get a CIS card, but if you want to subby to alot of other builder/contractors you will probably need to. You can do both CIS and normal work at the same time, you just need to make sure your tax returns are correct.

 

[southcoastboile]

he can just pay you and then you pay the tax through your accounts. He will pay tax on his invoice to the letting agent.

If you go the CIS route he will pay you your full invoiced amount minus 20% which he payes to the IR. Then when you do your taxes you can try to claim back some of that 20% if possible at the end of the year.

you dont have to get a CIS card, but if you want to subby to alot of other builder/contractors you will probably need to. You can do both CIS and normal work at the same time, you just need to make sure your tax returns are correct.

ok cheers AW makes a bit more sence now