Payroll again!

mcacelectrical

Hi guys

im a self employed electrician.
I work for an agency
the Agency pay me via a payroll company.

in my weekly statement payroll is £20 a week charge.

so this comes out first, then CIS tax is taken off and I’m given what is left.

my question is, is this an expense for the business?

If so can I claim this £20 as a business expense?

many thanks

matt

Jeremy535897

Presumably this describes your situation:

https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/pay-tax-and-claim-back-deductions

If your company pays a payroll administration cost, it should be able to claim it against its profit for corporation tax purposes.

mcacelectrical

Yes that’s correct.
So claiming against its profit for corporation tax, but I don’t pay corporation tax unless I’m a LTD company do I?
so I guess I claim it against my earnings being self employed CIS?

Jeremy535897

If you are self employed, why is a payroll company involved?

mcacelectrical

All agency’s use payroll companies now.
they won’t let you change payroll companies even if you ask.
if you cause a problem they simply say they have no more work for you.

Jeremy535897

If they are charging you as a self employed person, deducting CIS tax and an administration charge, that the administration charge is deductible from your profits like any other expense. If they are treating you as an employee, and deducting tax and NIC rather than CIS, then it is an expense of your employment.

mcacelectrical

Hi Jeremy 
Thanks so much!
that’s a much easier way to read/understand it.
you’ve been a great help and I hope this thread helps a lot of other people.
lots of people in the industry went the LTD company route to avoid payroll fees.
When really they just needed to understand the system they where in better.
thanks again! 

Jeremy535897

I hope your confidence is not misplaced, as I am not sure I have got to the bottom of how these things operate, never having come across them, but it just seems to me that if you personally, rather than any company, suffers the cost, it must be one or other of the alternatives I mentioned.