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From: "robert home" <bob@sarahharvey.com>
To: <bob@sarahharvey.com>
Subject: tax
Date: Wed, 24 Apr 2019 16:20:46 +0100
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Self-employed subcontractor tax deductions
CIS Subcontractor
If you are a self-employed subcontractor, before you are first paid on a
new job the contractor you are working for will ask you for your address
and your Unique Tax Reference number (UTR). Your UTR is the 10 digit
number HMRC gives to you when you register as self-employed. It will be
shown on your tax return and on letters sent to you from HMRC. This
information will be used to find you on HMRC's Construction Industy Scheme
(CIS) system.
TaxAid Tip
If you have a registered both as self-employed and under CIS, but 30% tax
is being deducted from your money, you should check with HMRC and your
main contractor than your UTR number has been correctly recorded.
Contractors use an on-line system to tell HMRC of the monthly payments
they make to their subcontractors. Before the contractor is able to pay
you for the first time they must use that system to check that you are
registered for CIS (as well as being registered for self-employment). The
HMRC system will look for your UTR on its list of registered
subcontractors; it will then tell the employer what tax deduction to use.
The options are:
1. Payment after deduction of tax at 20% - most 'labour only'
subcontractors will have tax deducted at a flat rate of 20%. This means
that HMRC has found your UTR on their list of CIS subcontractors
2. Payment after deduction of tax at 30%. If 30% tax is deducted from
your pay, this means either that you haven't given your employer a UTR, or
that HMRC couldn't find your UTR on its list of registered subcontractors.
In either case you should contact HMRC and make sure that you are
correctly registered as self-employed and as a CIS subcontractor.
3. Gross payment - That is no tax deducted. You can only be paid gross
if you pass special tests - including a minimum turnover test and a recent
history of meeting all your tax obligations. Consequently this will only
apply to larger subcontractors who have specifically asked HMRC to be paid
without deduction of tax at source. Such subcontractors' tax affairs are
reviewed on an annual basis by HMRC to ensure that they continue to meet
the requirements.
More information on being paid gross can be found at
<https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/gross-payment-
status>
https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/gross-payment-s
tatus
Bob Home
Sarah Harvey Limited
Sarah Harvey House
37 Chandos Street
Leamington Spa
Warwickshire
CV32 4RL
Tel: +44(0) 1926 450545
Fax: +44(0) 1926 450658
Mobile: +44 (0)7887726814
email: <mailto:bob@sarahharvey.com> bob@sarahharvey.com
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style=3D'mso-line-height-alt:11.25pt'><b><span =
style=3D'font-size:22.5pt;font-family:"&quot",serif;color:#691E68;let=
ter-spacing:-1.15pt;mso-fareast-language:EN-GB'>Self-employed =
subcontractor tax deductions<o:p></o:p></span></b></p><p =
class=3DMsoNormal style=3D'line-height:11.25pt'><span =
style=3D'font-size:8.0pt;font-family:"Arial",sans-serif;color:#555555;tex=
t-transform:uppercase;mso-fareast-language:EN-GB'>CIS =
Subcontractor<o:p></o:p></span></p><p class=3DMsoNormal =
style=3D'margin-top:16.55pt'><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#555555;ms=
o-fareast-language:EN-GB'>If you are a self-employed subcontractor, =
before you are first paid on a new job the contractor you are working =
for will ask you for your address and your Unique Tax Reference number =
(UTR). Your UTR is the 10 digit number HMRC gives to you when you =
register as self-employed. It will be shown on your tax return and on =
letters sent to you from HMRC. This information will be used to find you =
on HMRC’s Construction Industy Scheme (CIS) =
system.<o:p></o:p></span></p><p class=3DMsoNormal =
style=3D'mso-margin-top-alt:0cm;margin-right:11.65pt;margin-bottom:0cm;ma=
rgin-left:14.55pt;margin-bottom:.0001pt;background:#3FA4A0'><b><span =
style=3D'font-size:10.5pt;font-family:"Arial",sans-serif;color:white;mso-=
fareast-language:EN-GB'>TaxAid Tip<o:p></o:p></span></b></p><p =
class=3DMsoNormal =
style=3D'mso-margin-top-alt:0cm;margin-right:11.65pt;margin-bottom:0cm;ma=
rgin-left:14.55pt;margin-bottom:.0001pt'><span =
style=3D'font-size:9.5pt;font-family:"Arial",sans-serif;color:#555555;mso=
-fareast-language:EN-GB'>If you have a registered both as self-employed =
and under CIS, but 30% tax is being deducted from your money, you should =
check with HMRC and your main contractor than your UTR number has been =
correctly recorded.<o:p></o:p></span></p><p class=3DMsoNormal =
style=3D'margin-top:16.55pt'><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#555555;ms=
o-fareast-language:EN-GB'>Contractors use an on-line system to tell HMRC =
of the monthly payments they make to their subcontractors. Before =
the contractor is able to pay you for the first time they must use that =
system to check that you are registered for CIS (as well as being =
registered for self-employment). The HMRC system will look for your UTR =
on its list of registered subcontractors; it will then tell the employer =
what tax deduction to use. The options are:<o:p></o:p></span></p><p =
class=3DMsoNormal =
style=3D'margin-left:22.5pt;text-indent:-18.0pt;mso-list:l0 level1 =
lfo1'><![if !supportLists]><span =
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style=3D'font:7.0pt "Times New Roman"'> =
</span></span></span><![endif]><b><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#333333;ms=
o-fareast-language:EN-GB'>Payment after deduction of tax at =
20%</span></b><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#333333;ms=
o-fareast-language:EN-GB'> – most ‘labour only’ =
subcontractors will have tax deducted at a flat rate of 20%. This means =
that HMRC has found your UTR on their list of CIS =
subcontractors<o:p></o:p></span></p><p class=3DMsoNormal =
style=3D'margin-left:22.5pt;text-indent:-18.0pt;mso-list:l0 level1 =
lfo1'><![if !supportLists]><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#333333;ms=
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style=3D'font:7.0pt "Times New Roman"'> =
</span></span></span><![endif]><b><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#333333;ms=
o-fareast-language:EN-GB'>Payment after deduction of tax at 30%. =
</span></b><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#333333;ms=
o-fareast-language:EN-GB'>If 30% tax is deducted from your pay, this =
means either that you haven’t given your employer a UTR, or that =
HMRC couldn’t find your UTR on its list of registered =
subcontractors. In either case you should contact HMRC and make sure =
that you are correctly registered as self-employed <i>and</i> as a CIS =
subcontractor.<o:p></o:p></span></p><p class=3DMsoNormal =
style=3D'margin-left:22.5pt;text-indent:-18.0pt;mso-list:l0 level1 =
lfo1'><![if !supportLists]><span =
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style=3D'font:7.0pt "Times New Roman"'> =
</span></span></span><![endif]><b><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#333333;ms=
o-fareast-language:EN-GB'>Gross payment</span></b><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#333333;ms=
o-fareast-language:EN-GB'> – That is no tax deducted. You can only =
be paid gross if you pass special tests – including a minimum =
turnover test and a recent history of meeting all your tax =
obligations. Consequently this will only apply to larger =
subcontractors who have specifically asked HMRC to be paid without =
deduction of tax at source. Such subcontractors’ tax affairs are =
reviewed on an annual basis by HMRC to ensure that they continue to meet =
the requirements.<o:p></o:p></span></p><p class=3DMsoNormal><span =
style=3D'font-size:11.5pt;font-family:"Arial",sans-serif;color:#555555;ms=
o-fareast-language:EN-GB'>More information on being paid gross can be =
found at <a =
href=3D"https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/gross-=
payment-status" target=3D"_blank"><span =
style=3D'color:#2856A6'>https://www.gov.uk/what-you-must-do-as-a-cis-subc=
ontractor/gross-payment-status</span></a><o:p></o:p></span></p><p =
class=3DMsoNormal><o:p> </o:p></p><p class=3DMsoNormal><span =
style=3D'mso-fareast-language:EN-GB'> <o:p></o:p></span></p><p =
class=3DMsoNormal><span style=3D'mso-fareast-language:EN-GB'>Bob =
Home<o:p></o:p></span></p><p class=3DMsoNormal><span =
style=3D'mso-fareast-language:EN-GB'>Sarah Harvey Limited<br>Sarah =
Harvey House <br>37 Chandos Street<br>Leamington =
Spa<br>Warwickshire<br>CV32 4RL<br> <br>Tel: +44(0) 1926 =
450545<br>Fax: +44(0) 1926 450658<br>Mobile: +44 =
(0)7887726814<br> <br>email: <a =
href=3D"mailto:bob@sarahharvey.com"><span =
style=3D'color:blue'>bob@sarahharvey.com</span></a></span><span =
style=3D'mso-fareast-language:EN-GB'><o:p></o:p></span></p><p =
class=3DMsoNormal><o:p> </o:p></p></div></body></html>
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