Discuss companys refusing to pay CIS? in the Electrical Forum area at ElectriciansForums.net

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A few years back, the Inland Revenue wrote to the Agencies in regards to false self employment.
Basically they told the Agencies that if it turned out they were paying workers a self employed when they should be treated as employed, the Agencies would have to pay any tax and NI owed.
Most of the Agencies then decided everyone would be PAYE or Ltd. they didn’t want to risk being caught out.
Some Agencies continued to pay CIS, and those are the only ones I will work for.
I did get caught out at the start, I started work for an Agency just before the new tax year, as far as I was concerned being paid CIS. However when I got paid I had been charged tax, NI and employer’s NI contribution.
I refused to sign the new contract the Pay Roll company wanted me to sign. The existing contract said I would be paid CIS.
Eventually I left to work for an Agency which would pay CIS.
At the end of the Tax year I just declared the deductions made as CIS tax paid.
The Pay Roll company told me it was up to the Agency to decide whether I was PAYE or CIS. Strange as I was the one paying the Pay Roll company a fee for them to pay me, not the Agency.
I asked who was employing me, apparently no one.
I never agreed with anyone to be paid PAYE and strangely, I never received a P45 or P60 detailing any of the tax or NI deductions.

Is it possible for you to suggest some companies that use CIS instead of Umbrella or CIS Umbrella?
 
Fast track, Diamond, Pier, to my knowledge.
BMSL, will on occasion pay CIS, though they seem to mostly pay Umbrella.
To be honest, any of them can pay CIS, you just need to check with them when accepting work.
 
Fast track, Diamond, Pier, to my knowledge.
BMSL, will on occasion pay CIS, though they seem to mostly pay Umbrella.
To be honest, any of them can pay CIS, you just need to check with them when accepting work.

Thank you mate.
I asked you because the ones I called all assumed that I want to work through an Umbrella in the first place and it gets frustrating after a while when you like the details of a job, like the pay and then you get told you need to register with some people that supposedly will "handle" your payroll and bite a freaking 1/4 in useless payments off of your days work. And the most annoying part is that there is often little room for negotiations, like when you get told that you need to use their Umbrella that takes 100GBP per month instead of another one that you found on the internet for just over 50 GBP...

Oh my, I guess I went on a bit of rant here :)
 
My experience, is that all Agencies now use payroll companies.
Most will want you to use their payroll company, though many will allow you to use another.

It’s not so much that they assume you want to work through an Umbrella scheme, it’s more that they prefer it if you do, to limit their liability if it turns out in the future that they allowed CIS when they shouldn’t have.

Even with a Ltd Co. some of the Agencies are now insisting a payroll company is used.
 
2020 is the year that companies cannot use subcontractors going through there own ltd companies in the private sector.
Some Agencies now state umbrella only.
 
The best way round 1R35 is to work for more than 1 company per year.

That is a myth unfortunately. If you are not purchasing materials or not responsible to correct faults and snags out of your own pocket you are classed as employed and should be PAYE. It makes no difference how many companies you work for.
 
That is a myth unfortunately. If you are not purchasing materials or not responsible to correct faults and snags out of your own pocket you are classed as employed and should be PAYE. It makes no difference how many companies you work for.
It’s not being PAYE, that’s an issue.
It’s this bogus PAYE that the agencies want us to take, where, we aren’t employed by anyone, and we have to pay the employer’s NI contribution.
 
It’s not being PAYE, that’s an issue.
It’s this bogus PAYE that the agencies want us to take, where, we aren’t employed by anyone, and we have to pay the employer’s NI contribution.

Under an umbrella you are your own employee just like a company director so employers NIC is down to you.
 
Exactly.
If the director is employed, the company that employs them pays the employer’s NI contribution.
It could be that the director is the owner and sole director of a Ltd Company, so technically the director is employing them self and as the employer pays employer’s NI contribution.

The Umbrella scheme is not a Ltd Company paying a director.
It’s a scheme for agencies to pay workers that they supply to companies.
If the agencies want to employ workers, then the agencies should pay the employer’s NI contribution.
Then as an employee, the worker will have a contract of employment, be entitled to holiday pay, sick pay, etc.
 
Exactly.
If the director is employed, the company that employs them pays the employer’s NI contribution.
It could be that the director is the owner and sole director of a Ltd Company, so technically the director is employing them self and as the employer pays employer’s NI contribution.

The Umbrella scheme is not a Ltd Company paying a director.
It’s a scheme for agencies to pay workers that they supply to companies.
If the agencies want to employ workers, then the agencies should pay the employer’s NI contribution.
Then as an employee, the worker will have a contract of employment, be entitled to holiday pay, sick pay, etc.

This is it. What an umbrella company is is a group of small Ltd companies under one umbrella. So your ‘company’ is probably called ‘28562836’ but it is a Ltd company under the umbrella of the agency. As such ‘technically’ you are the Director of company 28562836 and so you pay employers NIC on the wages you give to yourself as Company Director.
 
In the past, there were Umbrella payment companies, where each worker became a director of the umbrella company (usually after having paid a fee) and then the worker was paid a minimum wage, tax and employer’s and employee’s NI was deducted, and the rest paid to the worker as a dividend.
Such companies were outlawed some time ago by HMRC.

Your suggestion that Payroll companies are now setting up each worker as a Ltd. Co. then paying the worker as a director of a company the worker has no knowledge of, sounds ludicrous.
Would the payroll company set up these Ltd. Companies in advance, then just allocate each worker to the next available Ltd. Co. on the list?
Or would they just set up a new Ltd. Co. for each worker, as and when the agency passed on the worker’s details?

The biggest question, is how would they obtain authorisation to deal with Companies House, Corporation Tax and the CIS/PAYE department without the worker’s knowledge?
 

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