Taxation and subbies

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johniosaif

johniosaif

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If you do a job for a builder, labour only for £1000.00 tax is £200 ok, then if you were paying someone half of the money from the job less tax, ie his £500 less tax then he would have £400, how much would you have left? thoughts please ?
 
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it all depends how long it took you and your labourer to earn the £1000. any longer then three days then you are on a looser!
 
The net payment to you is £800. You have to pay your mate £500, (£100 to the CIS office & £400 to matey) so you are left with £300 to take home. Alternatively, invoice separately and you will each take home £400. If you are making good money, and can afford to go on like that, you will get a nice rebate at the end of the tax year as you will have paid , in effect, double the tax.
If there were four of you and you had done £2k worth of work and each were expecting an equal share, you'd end up with £100. Really makes it worth getting out of bed.
 
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TonyM said:
The net payment to you is £800. You have to pay your mate £500, (£100 to the CIS office & £400 to matey) so you are left with £300 to take home. Alternatively, invoice separately and you will each take home £400.
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It is a peculiar one when taxation is supposed to be fair, you would need to be a limited company and pay the tax at the end of the fiscal year for it to weigh in on an even keel otherwise you are basically lending money to the tax man till the end of your tax year, This is why I now give an invoice one week in my name and the next in my plasterers name so we both get paid and do not end up out of pocket albeit temporarily..
 
johniosaif said:
It is a peculiar one when taxation is supposed to be fair, you would need to be a limited company and pay the tax at the end of the fiscal year for it to weigh in on an even keel otherwise you are basically lending money to the tax man till the end of your tax year, This is why I now give an invoice one week in my name and the next in my plasterers name so we both get paid and do not end up out of pocket albeit temporarily..
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Are you both registered for CIS as contractors though?
 
johniosaif said:
It is a peculiar one when taxation is supposed to be fair, you would need to be a limited company and pay the tax at the end of the fiscal year for it to weigh in on an even keel otherwise you are basically lending money to the tax man till the end of your tax year, This is why I now give an invoice one week in my name and the next in my plasterers name so we both get paid and do not end up out of pocket albeit temporarily..
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Can you not get a gross payment card ,sort your own ?
 
TonyM said:
The net payment to you is £800. You have to pay your mate £500, (£100 to the CIS office & £400 to matey) so you are left with £300 to take home. Alternatively, invoice separately and you will each take home £400. If you are making good money, and can afford to go on like that, you will get a nice rebate at the end of the tax year as you will have paid , in effect, double the tax.
If there were four of you and you had done £2k worth of work and each were expecting an equal share, you'd end up with £100. Really makes it worth getting out of bed.
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You can apply to be paid the full amount.
 
Not sure what the figure is now, but it use to be that in order to get a gross payment certificate, you had to be earning fifty odd grand a year, YOURSELF! LABOUR!
The thing is, would you trust yourself not to spend the extra 20% before the end of the year, and leave yourself having to find thousands in tax? I know I couldn't.
 
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johniosaif said:
If you do a job for a builder, labour only for £1000.00 tax is £200 ok, then if you were paying someone half of the money from the job less tax, ie his £500 less tax then he would have £400, how much would you have left? thoughts please ?
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You would earn £300
 
superspread said:
You would earn £300
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Earn four but have £300 left..not a lot out of the £500 is it.. you would expect an easy route out of this as each subby has either a labourer or another plasterer so has to make deductions as he pays them from the original sum..
 
I do know plasterers that have had the gross card ,but gone back to deductions so they don,t get large tax bills ,it,s horses for courses John
 
TonyM said:
Vat's not that bad.
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Oh I know but my income used to be so complicated, door work on weekends(paye) CIS work plastering etc, buying a house to renovate and sell, renting ie landlord on occasion and I am bad with records....I am well able to do it but so damn careless and end up paying the accountant a lot, it used to be because I was so busy, six days working and two nights along with a social life and family life and I was making decent money. Less busy now like most of us,hard to do houses now, so expensive and the banks look own on us self employed, retired from the doors after year of been spat on, hit with bricks, chairs, broken bottles etc(why did I give that up)
 
Have a company thats vat for new builds and one that's not for anything else.

The only way to sort your tax situation out is to become gross, which is not easy to get or form a partnership with you work partner. That would be the simplest way.
 
Assuming you're both CIS registered as you should be (and you would need to be registered as both sub-contractor, or you'll get a 30% deduction if not registered, and also as contractor to pay your mate):
The net payment to you is £800 (client paid £200 to CIS and should give you a certificate of CIS deduction each month). You have to pay your mate £500, (£100 to CIS & £400 to matey).
The £100 CIS is off-set against the £200 CIS deduction you suffered; as in, you don't actually pay another £100 out anywhere.
You are still left with £400 take home.
 
gowith said:
Assuming you're both CIS registered as you should be (and you would need to be registered as both sub-contractor, or you'll get a 30% deduction if not registered, and also as contractor to pay your mate):
The net payment to you is £800 (client paid £200 to CIS and should give you a certificate of CIS deduction each month). You have to pay your mate £500, (£100 to CIS & £400 to matey).
The £100 CIS is off-set against the £200 CIS deduction you suffered; as in, you don't actually pay another £100 out anywhere.
You are still left with £400 take home.
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how does the off set bit work, do you notify hmrc etc
 
I don't bother.
95% of the time , i work as the contractor directly for the client . So cis doesn't apply .
Though occasionally will sub contract for local builders , simply invoice them and they pay it in full.
Occasionally i employ subbies to help me out , they issue me with an invoice , i pay them in full. Never been a problem , no one has ever queried it . I obviously have a cis card , no one has ever asked to see it , i've never asked to see any of my subbies cards.
 
You need to be PAYE registered as an employer to then register for CIS. Monthly return for both so it's not much more effort, but it's still a load of work as an unpaid tax collector with £100 fines at every turn if you make any mistakes or are late etc etc.
 
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