cis - self employed - help

raq

we have a small business. We received a cheque from b and q for work that we carried out. When we finally received payment from them, they deducted £150.00 for the cis scheme. Is this correct ? We have never actioned anything to do with this before

This is very new to us and don,t know how to input this deduction in our accounts book

Any help would be great
Many thanks

antrobus

CIS is the Construction Industry Scheme. B&Q have deducted income tax on the payment due to you in accordance with the rules. The income tax you've paid will be taken into account when you submit your SA return.

Put the paperwork in a safe place and hand it to your accountant when the time comes. Don't worry about entering a deduction in your accounts book.

Estateprincess

The CIS amount should be based on the Labour element of the work that you carried out for B&Q.

B&Q would have verified you with HMRC using your company UTR and either your company number or if your not limited your personal (or partnership) NI number. HMRC will then have told them what percentage of tax to deduct from their payment to you.

B&Q will pay the amount deducted (£150.00) directly to HMRC and you then claim that payment against your year end tax payable amount.

The original amount you invoiced B&Q remains the same in your accounts, you need to make no alterations. B&Q should send you a CIS Monthly Statement showing the deduction, you need to keep this safe and as antrobus said your accountant will use it when calculating your actual tax amount due.

HTH

raq

Estateprincess wrote: »

The CIS amount should be based on the Labour element of the work that you carried out for B&Q.

B&Q would have verified you with HMRC using your company UTR and either your company number or if your not limited your personal (or partnership) NI number. HMRC will then have told them what percentage of tax to deduct from their payment to you.

B&Q will pay the amount deducted (£150.00) directly to HMRC and you then claim that payment against your year end tax payable amount.

The original amount you invoiced B&Q remains the same in your accounts, you need to make no alterations. B&Q should send you a CIS Monthly Statement showing the deduction, you need to keep this safe and as antrobus said your accountant will use it when calculating your actual tax amount due.

HTH

thanks but we have no accountant as we are a tiny business. where do i state thiss in our eab1 green accounts book. or where do i state this figure on the official paperwork from the tax office when we receive it in april.
thanks again

chrismac1

If you are a sole trader or partnership, box 37 (10-11 return) is purely for CIS subbies to enter the CIS tax suffered. This means that most CIS sub-contractors get a tax refund, as the 20% deduction is over the odds.

So when the database rolls over for 11-12 returns on 10 April or so, I have a queue of 13 tax returns to enter, all refunds and mostly CIS. All being well the cash will hit their bank accounts by 15 May or so.

For limited companies who are also paying PAYE, they can deduct the CIS tax off their PAYE payments so they get their refunds a bit sooner.

raq

chrismac1 wrote: »

If you are a sole trader or partnership, box 37 (10-11 return) is purely for CIS subbies to enter the CIS tax suffered. This means that most CIS sub-contractors get a tax refund, as the 20% deduction is over the odds.

So when the database rolls over for 11-12 returns on 10 April or so, I have a queue of 13 tax returns to enter, all refunds and mostly CIS. All being well the cash will hit their bank accounts by 15 May or so.

For limited companies who are also paying PAYE, they can deduct the CIS tax off their PAYE payments so they get their refunds a bit sooner.

Hi there,

apologises for the delay but rather busy with paperwork:mad:
Anyway, my husband is a sole trader and this is the first time we have been hit with a cis figure.

So basically when we receive the paperwork from the tax office to input the £150.00 into box 37??

This is all so new to us and the tax people scare me so I always make sure the t and the i,s or crossed.

huge thankyou

chrismac1

Yep. File it online in April for 2 reasons:

1. It's an undeniable record you have submitted it. HMRC can and do deny mail including recorded delivery mail which they generally refuse to sign for.

2. If you are in a refund situation, you can put your sort code and account number into the return and the money comes through in 2 to 4 weeks.

raq

chrismac1 wrote: »

Yep. File it online in April for 2 reasons:

1. It's an undeniable record you have submitted it. HMRC can and do deny mail including recorded delivery mail which they generally refuse to sign for.

2. If you are in a refund situation, you can put your sort code and account number into the return and the money comes through in 2 to 4 weeks.

marvelous stuff.

Any chance you can answer something else as you seem to be super duper on these questions;)

We didn,t have a tax bill to pay for this year 2010- 2011 as business very very very slow. What part of the tax form do we state this or is our records updated automatically.

So say profit was £5,000.00

minus your personel allowance - 6,475 ( there abouts )

= tax office owing us.

Sorry do hope this makes sense

sweetietot

The personal allowance does not roll over from year to year, so if your profit for 10/11 was £5000 HMRC will not owe you anything.