CIS Scheme (tax)

2143lewis

Hi all.
Hope you are well ? 
I have no idea how the tax works for being self-employed in the CIS scheme and need help.

Posting on behalf of my brother. (18) I got him a job with my friend's dad working as a labourer to try to get him some experience before he decided on a career he wants to pursue. He worked there for around 6 months. He was paying 20% tax but never met the £12500 threshold. Think he was on around £300 a week.

We have tried for a few months to get a P60 or wage slip from his employer but no luck. My friend's dad working abroad and the company won't reply to emails and calling gets nowhere. 

He has to submit a self-assessment but this asks how much he has earned and the company's tax code which we can't get.

What do we do? He should also be entitled to a tax rebate and he will miss out on this if we can submit it.

Thanks for the help in advance. 

Dazed_and_C0nfused

P60's and payslips are for people who are employed not running their own business.

He needs a CIS certificate from whoever he did the work for but presumably he has his own records so he knows what his turnover and business expenses are?

2143lewis

Dazed_and_C0nfused said:

P60's and payslips are for people who are employed not running their own business.

He needs a CIS certificate from whoever he did the work for but presumably he has his own records so he knows what his turnover and business expenses are?

He was just working as a labourer getting a wage every week from the company with tax deducted.

He has records of his wages going in that's it. 

[Deleted User]

2143lewis said:

Dazed_and_C0nfused said:

P60's and payslips are for people who are employed not running their own business.

He needs a CIS certificate from whoever he did the work for but presumably he has his own records so he knows what his turnover and business expenses are?

He was just working as a labourer getting a wage every week from the company with tax deducted.

He has records of his wages going in that's it. 

As Dazed has said - he needs a CIS certificate from the company. P60 forms are appropriate for employees. 

If he is being asked for his tax code on the self-assessment form he is completing the wrong section. He has no employment but is self-employed and must complete the self-employed section.

serpico100

You also won’t need the company’s tax code as that is only needed if you paid tax through PAYE. HMRC will have records of the amount of tax paid through your brother’s UTR number which I assume he has? The important thing is to have records of his gross payments and tax paid each week. If he doesn’t have ‘payslips’ of any description, the tax paid is easy to work out from his net payments.

Jeremy535897

I find it most unlikely that he is a subcontractor, as he would need to have registered as a subcontractor with HMRC and obtained a UTR for the contractor to operate CIS at 20%. See https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/how-to-register
It is much more likely that he was an employee, and therefore should have received a P45. If he had £1,560 deducted, and owes nothing, it would be worth making a bigger effort. Can he contact the friend's father abroad, or turn up at the company's offices?

[Deleted User]

Jeremy535897 said:

I find it most unlikely that he is a subcontractor, as he would need to have registered as a subcontractor with HMRC and obtained a UTR for the contractor to operate CIS at 20%. See https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor/how-to-register
It is much more likely that he was an employee, and therefore should have received a P45. If he had £1,560 deducted, and owes nothing, it would be worth making a bigger effort. Can he contact the friend's father abroad, or turn up at the company's offices?

But the op mentioned the CIS scheme and, presumably, his son  has a UTR as a self-assessment form is being completed? 

Jeremy535897

"He will have to complete a self assessment form" isn't the same as saying he has a UTR. In addition, he is hardly a subcontractor if he only ever worked for one contractor. It has the feel to me of someone just working for a contractor who put them on payroll with a BR code, for no reason other than they didn't ask the right questions of him at the outset. I could be wrong, I admit, but it is easily answered by OP.

2143lewis

serpico100 said:

You also won’t need the company’s tax code as that is only needed if you paid tax through PAYE. HMRC will have records of the amount of tax paid through your brother’s UTR number which I assume he has? The important thing is to have records of his gross payments and tax paid each week. If he doesn’t have ‘payslips’ of any description, the tax paid is easy to work out from his net payments.

Yes, He had to fill in a subcontractor form and give over his CIS and UTR numbers. 

He has the amount of gross paid every 2 weeks from his statements. 

Jeremy535897

My suspicions were wrong then, although I have to say that I doubt that he is a genuine subcontractor. If he is not, that is the contractor's problem though.

He should have received one of these every two weeks:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/375454/cis-payment-deduction-statement.pdf

Some contractors also provide an annual statement of pay and tax deductions under CIS.

If he knows exactly what his gross receipts were, then 20% of this was tax. He will no doubt have expenses he can deduct.

serpico100

2143lewis said:

serpico100 said:

You also won’t need the company’s tax code as that is only needed if you paid tax through PAYE. HMRC will have records of the amount of tax paid through your brother’s UTR number which I assume he has? The important thing is to have records of his gross payments and tax paid each week. If he doesn’t have ‘payslips’ of any description, the tax paid is easy to work out from his net payments.

Yes, He had to fill in a subcontractor form and give over his CIS and UTR numbers. 

He has the amount of gross paid every 2 weeks from his statements. 

It looks like he’s now ready to fill in his self assessment form then. How much tax refund he gets will obviously depend on any other income he had in the tax year, if any. Good luck