Heads up VAT changes 1st Oct

[fred]

Applies to construction only by the looks, if you are a main contractor there isnt much change except your cashflow will improve as you no long pay subbies VAT.

If your a subbie then you are going to take a hit in cashflow as you will stand the vat until your next vat return. If this is likely to be painful then go for monthly vat so your only waiting a month max.

As allways there a big fines for the main contractor if they pay vat to a subbie, not only will they lose the vat they paid, they will have to pay it again to HMRC and a fine on top.

 

[V8Druid]

that could get expensive

Applies to construction only by the looks, if you are a main contractor there isnt much change except your cashflow will improve as you no long pay subbies VAT.

If your a subbie then you are going to take a hit in cashflow as you will stand the vat until your next vat return. If this is likely to be painful then go for monthly vat so your only waiting a month max.

As allways there a big fines for the main contractor if they pay vat to a subbie, not only will they lose the vat they paid, they will have to pay it again to HMRC and a fine on top.

 

[Mintsauce]

Here we go again.

https://www.theconstructionindex.co.uk/news/view/we-need-to-talk-about-vat

more red tape it seems. Looks to be arranged for small to medium businesses. find life tough enough as it is.

 

[JD450A]

“Effectively, if you use the VAT, you are borrowing from the state – unarranged and without interest. There aren’t many cases in business where that kind of transaction would be allowed.”

But It's fine for the government to borrow money via the CIS scheme

I will still be charging Vat for anything that's not CIS.

 

[Mintsauce]

You can register for CIS exempt but I have doubt if this will make a difference

 

[sjs5060]

Rory the cis is an utter farce, currently threatening to take my machines off me, when they finally get off their arses and update whatever shite they need to they'll then see that they actually owe me £13k. They're the most unhelpful bunch of f.u.king winkers you could come across. And now they want deduct 20% and not have vat paid to us. Utter joke.
IMHO this could have quite far reaching reprocussions, if enforced it will bugger a lot of subbies up. If that happens they'll end up on the cards at the big outfits, hence there will be no more smaller firms on site not only making it almost impossible for bloke to start up in the job but also give all the money to the big firms who lets face it, are better at/more likely to be avoiding tax.

Ste

 

[JD450A]

Rory the cis is an utter farce, currently threatening to take my machines off me, when they finally get off their arses and update whatever shite they need to they'll then see that they actually owe me £13k. They're the most unhelpful bunch of f.u.king winkers you could come across. And now they want deduct 20% and not have vat paid to us. Utter joke.

#1 reason I have no interest in employees. We are CIS as a worker... f**k going fully registered

 

[Mintsauce]

Is this about labour only, or all services rendered? I'm easily confused.

 

[fred]

If you are subbing to a main contractor then its everything you invoice. It's really only materials the you outlay for which is going to cause cash flow problems as you will have to stand the VAT until your next return. Switch to monthly VAT and you will have to wait max 2 weeks to get paid back.

With regard to CIS, there is no CIS on materials which can be handy if you know what i mean.

 

[Mintsauce]

If you are subbing to a main contractor then its everything you invoice. It's really only materials the you outlay for which is going to cause cash flow problems as you will have to stand the VAT until your next return. Switch to monthly VAT and you will have to wait max 2 weeks to get paid back.

With regard to CIS, there is no CIS on materials which can be handy if you know what i mean.

perfect. Thanks

 

[fred]

Rory the cis is an utter farce, currently threatening to take my machines off me, when they finally get off their arses and update whatever shite they need to they'll then see that they actually owe me £13k. They're the most unhelpful bunch of f.u.king winkers you could come across. And now they want deduct 20% and not have vat paid to us. Utter joke.
IMHO this could have quite far reaching reprocussions, if enforced it will bugger a lot of subbies up. If that happens they'll end up on the cards at the big outfits, hence there will be no more smaller firms on site not only making it almost impossible for bloke to start up in the job but also give all the money to the big firms who lets face it, are better at/more likely to be avoiding tax.

Ste

Not quite you may be confusing the two. CIS is merely payment on account for your annual tax bill. You can apply to be paid gross if you can demonstrate to HMRC you have the funds (5 figures in the bank) to pay your tax annually. So its something you will have to pay anyway rather than a deduction.

The VAT is only a big hit if you are a large materials supplier to a main contractor as you will have paid the VAT out when you bought the materials and will now have to reclaim it on your VAT return rather than being paid it on your invoice. Switching to monthly VAT may see you getting paid quicker especially if your on 30 day terms you will definitely get it back quicker.

Losing the VAT on your labour means you will probably now be receiving money from HMRC each return rather than paying them, change to cashflow pattern but not a nightmare scenario ?

 

[Jimoz]

CIS stoppages seem messed up. I didn't know since issuing invoices for subbing through company I had to do a eps/fps with PAYE tools and declare cis stopped every month. Why does the 'taxed' party have to do that if the 'taxer' is already doing that every month. I genuinely had no idea. Currently waiting for a refund of CIS that is actually more than the corp tax bill for that year. Had to file an EPS/FPS with the whole years amount stopped cis on - bet they didn't like that.

I reckon I will just stop subbing to any contractor. They're crap jobs anyway

 

[fred]

CIS stoppages seem messed up. I didn't know since issuing invoices for subbing through company I had to do a eps/fps with PAYE tools and declare cis stopped every month. Why does the 'taxed' party have to do that if the 'taxer' is already doing that every month. I genuinely had no idea. Currently waiting for a refund of CIS that is actually more than the corp tax bill for that year. Had to file an EPS/FPS with the whole years amount stopped cis on - bet they didn't like that.

I reckon I will just stop subbing to any contractor. They're crap jobs anyway

as a subbie you dont have to do CIS or PAYE (unless you have employees) until the year end. You would have noticed you were stopped CIS as what you got paid would not have matched your invoice ?

Have you got an accountant , they should be sorting all this for you. Nearly all the subbies I know get a refund from CIS every year.

 

[Jimoz]

You do if your subbing as a company fred, supposed to submit amount stopped each month with an EPS through Basic PAYE tools apparently. Was news to me too. Obviously as an individual subbie you don't have to do this.

I knew i had been stopped it was in my spreadsheet. All I'm saying is if the company has a UTR, just like an individual subbie then why does
-Contractor deduct CIS from individual subbie, reports at end of month, subbie reclaims at end of year
-Contractor deduct CIS from 'company subbie', reports at end of month, 'company subbie' is also expected to report amount stopped each month.

Im not fretting about it, end of the day they still owe me.

 

[fred]

You do if your subbing as a company fred, supposed to submit amount stopped each month with an EPS through Basic PAYE tools apparently. Was news to me too. Obviously as an individual subbie you don't have to do this.

I knew i had been stopped it was in my spreadsheet. All I'm saying is if the company has a UTR, just like an individual subbie then why does
-Contractor deduct CIS from individual subbie, reports at end of month, subbie reclaims at end of year
-Contractor deduct CIS from 'company subbie', reports at end of month, 'company subbie' is also expected to report amount stopped each month.

Im not fretting about it, end of the day they still owe me.

Have you got employees ? If not then why bothering with monthly PAYE, scrap that right away and let the accountant sort it at the end of the year. One of the advantages of a Ltd co is you are not an employee as the owner.

 

[Jimoz]

I am an employee of the company. Minimum salary to get my national insurance stamp. TBH I'm far too tight and bring all this crap on myself by refusing to delegate these things to those better at them. The thing is i'm not sure I want to progress to next level where your chasing the work to cover the expenses. I like being able to take it or leave it

 

[Pedrod355]

If your Ltd and your ie the director you are classed as a employee and need to declare paye/NI every month or file nile returns every month dependent on how you pay your self from the company, just found this out from HMRC this wk as they were guessing what my paye/ni was every month because i wasn’t filing returns as i didn’t no any better...

 

[Jimbo69]

I've recently set up as Ltd, accountant does everything including payroll. The idea of me putting in a CIS report is the CIS deducted from me every month offsets the employers NI and PAYE I would have to pay. It means I won't get as much back at the end of the tax year though, swings and roundabouts I suppose.

 

[Brendan]

Cis returns are monthly, thought the charge back was only on labour and not materials?

Issue for me is I'll have to leave the flat rate scheme as it will not workout on this.

It's also more paperwork every month as will now have to do monthly vat returns as well if you want to be able to get vat back each month instead of quarterly

 

[Jimbo69]

Cis returns are monthly, thought the charge back was only on labour and not materials?

I’m not 100% sure but I think you have to separate them on the invoice.