Re: What are the new CIS rules?


"John" <john@xxxxxxxxxxxx> wrote in message news:4629d6e4$0$16336$88260bb3@xxxxxxxxxxxxxxxxxxxx
"Martin" <ngng@xxxxxxxxxxxxxxxxxxxxxxxxxx> wrote in message news:VLkWh.8665$537.892@xxxxxxxxxxxxxxxxxxxxxxx

"John" <john@xxxxxxxxxxxx> wrote in message news:4628ffa2$0$16374$88260bb3@xxxxxxxxxxxxxxxxxxxx

"Martin" <ngng@xxxxxxxxxxxxxxxxxxxxxxxxxx> wrote in message news:dZRVh.4413$kb4.4288@xxxxxxxxxxxxxxxxxxxxxxx

"John" <john@xxxxxxxxxxxx> wrote in message news:4627b921$0$16388$88260bb3@xxxxxxxxxxxxxxxxxxxx

"John" wrote in message
I have noticed other recent posts mention new CIS rules
for sub-contractors, but what are they?

So if I pay someone cash for doing subcontract work for me without
registering myself as a main contractor with hmrc, then ringing up hmrc
quoting the subcontractor's tax registration number and national
insurance number to determining their tax status first, I will get stung for
the tax I should have deducted from the payment plus penalties on top.


"Martin" wrote in message .

No. It only applies to contractors (and a few other commercial sector businesses) "employing" subbies - all of whom have received several mailings about "new CIS". The "sub" in subcontractor is significant - they don't "sub" to end-client.

HTH
Martin

No you may have misunderstood. I am a plumber and I am registered for VAT. I
sometimes employ an electrician to carryout the electrics on jobs because
it needs someone who can issue a certificate to the customer. I bill the
customer for my own work and the electrician's work and pay the electrician
after deducting a 10% commission off the amount he is charging me to do this
work.
Under the new CIS I need to determine the electrician (subcontractor's) status
before paying him.


I did indeed misunderstand - sorry. "New-CIS" changes the procedure for verifying subbies, but as you already act as a contractor and use subbies from time to time, you should already have registered - so I suggest you do this a.s.a.p. Unless your electrician is not registered as a subbie, you will have to deduct 30% from his payments and remit to HMRC :-((

Martin

Would a legitimate way around my having to register as a contractor be:

Say I bill the customer £1000 + VAT for my own plumbing work.
The electrician bills the customer directly £500 (no VAT) for his work
and I then bill the electrician £50 as my commission for passing the
electrical work on to him.
The gain being that it is cheaper for the customer, i.e. no VAT on the
electrician's £500 and I do not have to register as a contractor under
the new CIS rules.

I reckon if there's no issue regarding the "employment" status of the electrician, this should be ok - though others here may hold a different view/.

Would I have to charge the electrician VAT on the £50 commission?

Yes.


--
Martin

[Remove barrier to reply]

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