husband S/E - builder paid him minus tax? help

moomoominx

My husband is a self employed electrician - and did some work for a builder on a house - as he has done many times - but this builder on production of the invoice - set about with calculator and deducted the tax?? my husband said no i pay my own tax bill etc etc but the builder was adamant that he did this for anyone who worked for him - his accountant paid the tax and would need my husbands tax code nat ins number etc - and that there would then be a credit on his account? he doesnt know if this is ok - and we dont really want to ring up the tax office and bumble our way through explaining - takes ages on the phone to get through lol -so does anyone have any idea what i am going on about - as he is doing more work for him as i type - many thanks :mad:

pipscot

moomoominx wrote: »

My husband is a self employed electrician - and did some work for a builder on a house - as he has done many times - but this builder on production of the invoice - set about with calculator and deducted the tax?? my husband said no i pay my own tax bill etc etc but the builder was adamant that he did this for anyone who worked for him - his accountant paid the tax and would need my husbands tax code nat ins number etc - and that there would then be a credit on his account? he doesnt know if this is ok - and we dont really want to ring up the tax office and bumble our way through explaining - takes ages on the phone to get through lol -so does anyone have any idea what i am going on about - as he is doing more work for him as i type - many thanks :mad:

This is correct - this is the construction industry scheme and the builder (contractor) has to deduct tax when he pays a subcontractor such as your husband even though your husband is self-employed. When your husband does his tax return and the tax bill is calculated, this tax amount that has already been paid will be deducted from his bill.

Pennywise

If your hubbie isn't registered under the CIS scheme, he'll get 30% tax deducted. Your husband needs to register under the scheme and then tax will be deducted at the lower rate of 20%

Full details on HMRC website - http://www.hmrc.gov.uk/cis/

moomoominx

Many thanks thats really helpfull - we will look into the cis later when he gets home - thanks for taking time out to answer :0)

anne1996

Also make sure you get a certificate at the end of each month for the tax the builder has paid for you,,,,cause thats your proff its been paid

DCodd

It is not always quite that simple.

Does your husband ever employ other people? Was the house being worked on a privately owned house? Did your husband get a written contract for the works to be carried out? Dis the contractor pay your husband before they asked for his NI number?

Joining the CIS scheme carries a number of responsibilities that you should look into before you apply for payment status.