Not paying full bill until fully completed

System

ceredigion wrote: »

Because of CIS

Surely then the person acting as main contractor isn't actually a main contractor so presumably can't charge a main contractors profit on the subcontractors work? Interesting way around it as you'd imagine these guys have to pay that money to hmrc at some point

ceredigion

the_r_sole wrote: »

Surely then the person acting as main contractor isn't actually a main contractor so presumably can't charge a main contractors profit on the subcontractors work? Interesting way around it as you'd imagine these guys have to pay that money to hmrc at some point

Well in reality there isn't a main contractor and sub contractors ,they are all stand alone contractors. That said , if i refer to first primary contractor he will almost certainly be on a price for the job. Then the other contractors invoices would be subtracted from this price with the difference paid to the primary contractor . With regard CIS , yes the tax has got to be paid anyway but the CIS scheme can seriously muck up your cash flow, especially if you are employing people on PAYE. At 20% deduction from invoice is not the same as a 20 % tax on your wages. At this time of the year it could be 18 months before you get a credit.

Annie1960

If it's a small building firm, it may be to do with wanting to stay under the VAT threshold. Is there VAT on the invoices?

LandyAndy

Annie1960 wrote: »

If it's a small building firm, it may be to do with wanting to stay under the VAT threshold. Is there VAT on the invoices?

Or, if the main contractor is VAT registered but the subbies aren't then the OP is saving the VAT that the main contractor would have to add to their charges when they passed on the subbies costs.

missile

If there is work outstanding, you could choose to pay nothing.

Niv

Depending on what the work is would depend on my approach.


If I am getting an extension done then they would get payments after each 'stage gate' as would be agreed before the job starts.


If I am having a odd job man in to do a number of jobs and I change the job spec along the way I pay in a couple of lumps after each week (as have done recently)


If its a stand alone job for example a plumber installing a boiler - they wont get paid until the job is done to my satisfaction which includes and snagging being completed.