CIS bollocks.

[Storrsy]

I wonder if anyone can shed light on this. I'm not registered with the CIS. In 12 years of trading I've never had 30% tax deducted on my behalf before.
Anyhow just completed a job for the local council who have now said (after the invoice was submitted) that they will be deducting 30% tax on my behalf and paying it to HMRC. I was never made aware that this was going to be the case when I quoted the job. So essentially they are taking an extra 10% off my labour bill that I didn't account for.
I just can't see how this is acceptable. It amounts to blackmail and extortion. Why the f**k should I be charged extra tax!?
To clarify I undertake similar nature of works for many other organizations and have never been subjected to this. To say I'm frickin livid is an understatement.
I can't imagine this is anything new to all of you but would be interested of your experience of being a contractor not registered on the CIS.
Many thanks!

I should add that all my work is farm dry stone walling, associated digger work like tracks etc. I'm aware (now) that this work is considered construction. So why have I not encountered this when doing it for organisations like the local national park authority and even farmers etc.

 

[TiltyShaun]

Unfortunately they are correct. All you need to do is call HMRC and tell them you want to register as a Contractor and you will be given 20% deduction status.

There is some good news. You will be issued a tax deduction certificate at the end of the tax month in which you was paid. You can offset any tax deducted against any PAYE or CIS tax you are due to pay so you shouldn’t be out of pocket for long.

 

[hiluxman]

Just give information to whoever sorts you wages out (assuming you pay yourself weekly/monthly)
It will get deducted off the paye. So depending how much you could be in credit with them for a while. Or just claim it back later on. Either way you'll not loose out but it means you just don't get the money now.

 

[Storrsy]

Just give information to whoever sorts you wages out (assuming you pay yourself weekly/monthly)
It will get deducted off the paye. So depending how much you could be in credit with them for a while. Or just claim it back later on. Either way you'll not loose out but it means you just don't get the money now.

I understand that. But aside from being unaware that my work was under the construction banner.(more agricultural) What's annoying me is I pay tax at 20% when I do my self assessment not 30% that they're deducting off me. So gov now get another 10% of my income. As seemingly everything that breaks ground is under the "construction" banner I don't see how this level of extortion hasn't been experienced by many other contractors I know who aren't CIS registered, forestry contractor putting in a new track for example.

 

[6feetdown]

You should also only be taxed on the labour element. Next time invoice your digger at a 1000 a day and your labour at 50 as an example

 

[V8Druid]

even we were registered for CIS when I was operating, or the ba***rds'd deduct against invoices for construction type work - steel/crane hire/all sorts

 

[Antony Holmes]

You should also only be taxed on the labour element. Next time invoice your digger at a 1000 a day and your labour at 50 as an example

i got caught out earlier in the year

I have checked this out on HMRC web site



CISR14260 - The Scheme: construction operations: plant hire

· Payments for the hire of plant with an operator are subject to CIS.
dont make that much difference it may have done if cash flow was tighter

 

[hiluxman]

I understand that. But aside from being unaware that my work was under the construction banner.(more agricultural) What's annoying me is I pay tax at 20% when I do my self assessment not 30% that they're deducting off me. So gov now get another 10% of my income. As seemingly everything that breaks ground is under the "construction" banner I don't see how this level of extortion hasn't been experienced by many other contractors I know who aren't CIS registered, forestry contractor putting in a new track for example.

But you get the 10% back.

Don't worry I know exactly how you feel. Been there...t shirt and all that lot.

It's a crap system but so long as you've got your deduction vouchers then you just have to look at it as though you have just paid abut upfront.

 

[6feetdown]

i got caught out earlier in the year

I have checked this out on HMRC web site



CISR14260 - The Scheme: construction operations: plant hire

· Payments for the hire of plant with an operator are subject to CIS.
dont make that much difference it may have done if cash flow was tighter

So you cannot deduct plant cost?

 

[Antony Holmes]

So you cannot deduct plant cost?

you can deduct materials self drive plant but not operated plant, operated plant is apparently classed as labour

 

[Storrsy]

But you get the 10% back.

Don't worry I know exactly how you feel. Been there...t shirt and all that lot.

It's a crap system but so long as you've got your deduction vouchers then you just have to look at it as though you have just paid abut upfront.

Ok. So does that mean that the 30% taken off me now will be offset against my final end of year tax bill (where I'm taxed at 20%). I'm not losing the extra 10% as just extra tax?
Bloody hell what a system. It's crap like this that make me think why bother with self employment, I must as well just get a PAYE job and save all the grief!

 

[6feetdown]

Ok. So does that mean that the 30% taken off me now will be offset against my final end of year tax bill (where I'm taxed at 20%). I'm not losing the extra 10% as just extra tax?
Bloody hell what a system. It's crap like this that make me think why bother with self employment, I must as well just get a PAYE job and save all the grief!

Yes you won't lose it just have to wait!

 

[Storrsy]

I see on HMRC website. If you register ,which looks like I dont have a choice you can apply for gross payment status. So you just get paid as normal and you sort your own tax and NI out. Why doesn't everyone just do that if that's the case?

 

[JD450A]

I am Gross CIS registered. Talk to accountant about that. It's not the easiest thing to gain.

Personally I'd argue the toss that your a Agricultural/Ecological contractor, not construction. I assume this is a track resurfacing job?

 

[6feetdown]

you can deduct materials self drive plant but not operated plant, operated plant is apparently classed as labour

So you have a 100 grand machine on finance and they want you to pay 20% on the plant

 

[Antony Holmes]

So you have a 100 grand machine on finance and they want you to pay 20% on the plant

i got caught a few yeas ago on a job 20% cis /sc60 tax, 5% retention and 2% citb levy i did not spend too much time on that job

 

[GazCro]

Ok. So does that mean that the 30% taken off me now will be offset against my final end of year tax bill (where I'm taxed at 20%). I'm not losing the extra 10% as just extra tax?
Bloody hell what a system. It's crap like this that make me think why bother with self employment, I must as well just get a PAYE job and save all the grief!

Why bother with self employment? Well tbf i think that's the point of it to deter folk from being self employed and just subbing to same outfit all the time (which isn't supposed to be done but plenty are still). You get it back if they've taken too much off you at year end so it's not the end of the world if its only the odd job.

 

[GazCro]

I am Gross CIS registered. Talk to accountant about that. It's not the easiest thing to gain.

Personally I'd argue the toss that your a Agricultural/Ecological contractor, not construction. I assume this is a track resurfacing job?

Does gross registration not require a minimum turnover (100k a year for 3 years running or something like that)

 

[Furniss]

Ok. So does that mean that the 30% taken off me now will be offset against my final end of year tax bill (where I'm taxed at 20%). I'm not losing the extra 10% as just extra tax?
Bloody hell what a system. It's crap like this that make me think why bother with self employment, I must as well just get a PAYE job and save all the grief!

Don't move to France if 30% gets your back up

 

[DaveDCB]

For cis registered customers I split my invoice into machine hire and labour cost at min wage, so only the labour portion was deducted, I didn’t mind so much as it kept the tax bill down at the end of the year..