B
brizospark
Just wondering if any of you self employed could help sort out my confusion over this one.
i am a sole trader and carry out a lot of work for builders, I am due a payment from a builder who says he will deduct 20% CIS tax, as I am aware of, and registered for.
I don;t understand how this works, firstly what if the case my bill is £1000 and I have spent £500 on materials. My profit is £500 here but I will only receive £800, therefore only actually getting £300 after materials paid and CIS paid. (£1000-20% = £800 - £500 materials = £300) Surely this cant be correct.
Secondly how does this work with self assessment, is it like this? Self assesment comes back that I owe them X amount lets say £5000, but I have already paid, lets say £2000 CIS. Does this automatically get calculated in self assessment as I owe them £300 instead of £5000?
Also, I have accounting software that tracks my bank feed and it is going to prove to be complicated to explain to this that although there is only £800 coming in that I have actually paid the £200 Tax.
Someone put me right with this!
i am a sole trader and carry out a lot of work for builders, I am due a payment from a builder who says he will deduct 20% CIS tax, as I am aware of, and registered for.
I don;t understand how this works, firstly what if the case my bill is £1000 and I have spent £500 on materials. My profit is £500 here but I will only receive £800, therefore only actually getting £300 after materials paid and CIS paid. (£1000-20% = £800 - £500 materials = £300) Surely this cant be correct.
Secondly how does this work with self assessment, is it like this? Self assesment comes back that I owe them X amount lets say £5000, but I have already paid, lets say £2000 CIS. Does this automatically get calculated in self assessment as I owe them £300 instead of £5000?
Also, I have accounting software that tracks my bank feed and it is going to prove to be complicated to explain to this that although there is only £800 coming in that I have actually paid the £200 Tax.
Someone put me right with this!