jef Posted March 17, 2010 Report Share Posted March 17, 2010 Can anyone shed some light on any recent changes to the CIS 25 self employment system?? Apparently there is a crack down on sub-contractors that have been working for the same firm for too long. Some say six months others six years. The guy I'm working for just now want's me to either take two weeks off to work somewhere else or start supplying materials and pricing work. I've only been working for him since November. I called the CIS helpline but the guy on the other end, although pleasant, said I had nothing to worry about. He too had heard rumours but that's all they were. He seemed to think they were always the last to know. Does anyone know any hard facts about this?? This may read slightly vague but if you know what I'm on about you will understand my question. James Quote Link to comment Share on other sites More sharing options...
sitsinhedges Posted March 17, 2010 Report Share Posted March 17, 2010 Form a Limited Company and you'll be employed by yourself, then the taxman wont be able to bother you. You'll pay less tax too :yp: Quote Link to comment Share on other sites More sharing options...
AdamW Posted March 17, 2010 Report Share Posted March 17, 2010 Can anyone shed some light on any recent changes to the CIS 25 self employment system?? Apparently there is a crack down on sub-contractors that have been working for the same firm for too long. Some say six months others six years. The guy I'm working for just now want's me to either take two weeks off to work somewhere else or start supplying materials and pricing work. I've only been working for him since November. I called the CIS helpline but the guy on the other end, although pleasant, said I had nothing to worry about. He too had heard rumours but that's all they were. He seemed to think they were always the last to know. Does anyone know any hard facts about this?? This may read slightly vague but if you know what I'm on about you will understand my question. James I have heard about it, My way round it is all the guys that work for me have a rolling 6 month contract, and they must have there own insurances, the contract is not very detailed,only that they are required to work where I put them, some other bits about sick pay etc, this keeps my accountant happy, as I could be liable for NI at 13% for each of them! Adam Quote Link to comment Share on other sites More sharing options...
Plumbob Posted March 18, 2010 Report Share Posted March 18, 2010 I think the revenue uses the term "must be seen to be taking a financial risk" to qualify as being truly self employed , a carpenter I know used to get his lads to supply their own screws and never had a problem. Dont know why they changed from the old 715 it seemed to work fine, and I always used to get a lump back just before christmas! Quote Link to comment Share on other sites More sharing options...
SXPhil Posted March 18, 2010 Report Share Posted March 18, 2010 Personally I don't see why all these people are allowed to be self employed its only the construction industry that get away with it NIC Avoidance !! Quote Link to comment Share on other sites More sharing options...
poorwullie Posted March 18, 2010 Report Share Posted March 18, 2010 Form a Limited Company and you'll be employed by yourself, then the taxman wont be able to bother you. You'll pay less tax too :yp: Does the taxman wear a limited company trading with only one person in the building trade? There was a big crackdown on same situation in oil - offshore industry a couple of years ago and one man bands working continually at the same place were banned. Should be easily circumvented though by putting an odd job through the books. Quote Link to comment Share on other sites More sharing options...
RC45 Posted March 18, 2010 Report Share Posted March 18, 2010 I think you will find IR35 was brought in to stop this behaviour, even with a Ltd company. A way round it, would be to have other customers as well as your main one. Phil Quote Link to comment Share on other sites More sharing options...
MPT1 Posted March 18, 2010 Report Share Posted March 18, 2010 Personally I don't see why all these people are allowed to be self employed its only the construction industry that get away with it NIC Avoidance !! You can be self employed in any industry. Construction is more likely to be transient, as soon as you start a job you're working your way out of work. Direct sales are self employed and claim back as much as they can. If you are working exclusively for one employer you will be considered employed by that firm. Quote Link to comment Share on other sites More sharing options...
AVB Posted March 18, 2010 Report Share Posted March 18, 2010 It is also very, very common in the IT industry. Probably 40% of the people employed in IT in the UK are 'contractors' - in reality limited companies employing just them and their wife. IR35 was supposed to clamp down on this but not sure what effect it had. Andrew Quote Link to comment Share on other sites More sharing options...
Doc Holliday Posted March 18, 2010 Report Share Posted March 18, 2010 Personally I don't see why all these people are allowed to be self employed its only the construction industry that get away with it NIC Avoidance !! I think not. I pay class 1 and class 4 NIC. Even if HMRC didn't deduct nic they would tack it on to the basic tax deductions. Either way they would get what they were after. You can be self employed in any industry. Construction is more likely to be transient, as soon as you start a job you're working your way out of work. Direct sales are self employed and claim back as much as they can. If you are working exclusively for one employer you will be considered employed by that firm. Exactly that. If you're in any doubt have a look here - http://www.hmrc.gov.uk/employment-status/index.htm It's basically a questionaire which points you in the direction as to whether you should be employed or self employed. HMRC also do something they called an opinion or a decision. The difference being that if you asked for their opinion it wasn't binding but if you asked for their decision it would be binding, either way and the employer/contractor would have to abide by that. hope that helps. Quote Link to comment Share on other sites More sharing options...
Dr W Posted March 18, 2010 Report Share Posted March 18, 2010 If you ask HMRC for their opinion on a contract, chances are it will be in their favour tax wise. You can do it yourself and just keep records of why a decision was made and how you decided that you were actually self employed. Fingers crossed IR35 will be done away with if the conservatives get in, one of the most ill thought out pieces of tax legislation. Quote Link to comment Share on other sites More sharing options...
jef Posted March 18, 2010 Author Report Share Posted March 18, 2010 Thanks so far chaps. I still pay 8% on my totals as NIC through my tax return at the year end. It came up today at work again as we have a bit more work in front of us. I was asked to start pricing parts of the job and supplying some materials. But I'm not VAT registered so then how does the main contractor reclaim the VAT on the new build? I also don't want to get myself into any bother, is this route dodgy?? April to November last year I worked for contractor "X", then November to March, I'm working for contractor "Y" which will continue until June when I may well go back to working for contractor "X". How would this be interpreted by HMRC?? Why can't I just work away, earn my wage and pay my taxes as I am at the minute? JF Quote Link to comment Share on other sites More sharing options...
MPT1 Posted March 19, 2010 Report Share Posted March 19, 2010 I f you are supplying materials ask your main contractor to accept a simple invoice Labour X Materials Y. Claim Y back in total from Contractor + nominal handling fee. Quote Link to comment Share on other sites More sharing options...
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