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Cis

Discuss Cis in the Business Related area at ElectriciansForums.net

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Hi guys looking for some help to save me hours on a phone to HRMC as i can't find the answer online... ok here goes and i hope its not to rambled

I do a £10,000 job for a main contractor ( labour only) he stops me £2000 under the CIS scheme simple.... now i get a little lost because my Sub contractor will bill me say £1000 to keep it simple i now have to stop his tax on already taxed income, so technically i'm paying 40% tax on the £1000.00

Is this right ? and how is this offset ?

Glen
 
I'm not in CIS but to me you are invoicing for £1000 + £9000 and having £200 + £1800 deducted.

You've already paid your Subby's tax to your Main contractor.
The £200 you deduct from your Subby, you keep, but must have to document it somehow.
 
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You're not paying anything on the tax you deduct from your subby. He is paying this 20%. You only pay him 80% and hand the 20% over to HMRC so you only lose 20% once.

Of course if your turnover is high enough and you meet the other two tests then you could apply for gross payment status.
 
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For CIS the max they can deduct is 30% on labour only. If you register with HMRC you have the option of the following providing your turnover is more than 30k. Either 20% deduction on labour or no deduction however you have to speak to HMRC and agree then and register otherwise 30% will be deductible
 
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