Advice with cis number and employed

[Wilson12]

Hi
Some advice would be appreciated.

im a Qualified employed social Housing Electrician.

I was asked to help on a commercial project from another company.
I’ve taken 20 days holiday to work as I’m interested to learn different works.

I’m due to start tomorrow and the guy has said he needs my cis number for hmrc.
Ive googled that And from what I can see I’d have to set up a company to apply for cis.

does anyone know what’s best to do and how long does this take.

I also noticed it says you only need to set up as a sole trader if you earn over 1000 pounds maybe because of the hassle could I do less days to be under 1000 so I don’t need to do all this?

much appreciated

 

[R-fur]

As far as I remember getting a CIS card is quick and cheap and a once in a lifetime thing. Say you are a sole trader and get the card anyway. I have one that I only use when asked for it on certain contracts.
The company will deduct 20% from what they pay you. They then send that money to HMRC and give you a credit note. You use the credit note agaist any tax bill or submit with your tax return.

 

[Risteard]

Cards haven't existed for many years.

I presume by CIS number he means your UTR (Unique Taxpayer Reference) number.

 

[Julie.]

You can be an individual.

Basically if you do any additional work or receive any renumeration other than your standard paye payments in you job, you will need to complete a tax return.

You do not need a cis registration, but then the company will take 30% off your payments, and pass it to hmrc.

With cis you can choose:
1) the company will take 20% off your payments (instead of 30%)
2) the company will take nothing off your payments

Whichever is used, when you complete the tax year, your tax return must show all these payments, you would then need to pay hmrc any due tax ( guaranteed with option 2), there may be not tax due (possible with option 1), or hmrc will pay you (likely with no registration).

For small adjustments they will change your tax code.

Now the sticky bit!

If you end up with tax due to/from hmrc in any one year, they will adjust your tax code on the understanding that this will happen the following year. Thus the following year you will either pay too much tax, or insufficient tax which would either be paid to you or due from you at the end of that year.

It always balances out to pay the correct amount, however it upsets the status quo for a time.

If you register for cis as an individual its your personal utr you provide.
If you register as a company its the company's corporation tax utr

 

[UNG]

As far as I remember getting a CIS card is quick and cheap and a once in a lifetime thing. Say you are a sole trader and get the card anyway. I have one that I only use when asked for it on certain contracts.
The company will deduct 20% from what they pay you. They then send that money to HMRC and give you a credit note. You use the credit note agaist any tax bill or submit with your tax return.

If it was a once in a lifetime thing I would still be using my 714 card

 

[Julie.]

If it was a once in a lifetime thing I would still be using my 714 card

Oh that's going back!

I hated the hassle of that 715 scheme, the paperwork was horrendous, the 715 form was a pain to complete, I had to enter all the guy's 714 details on it every month, so easy to get it wrong.

But couldn't pass it over to admin staff because the bulk of it was dates on and off site and so on.

 

[UNG]

Oh that's going back!

I hated the hassle of that 715 scheme, the paperwork was horrendous, the 715 form was a pain to complete, I had to enter all the guy's 714 details on it every month, so easy to get it wrong.

But couldn't pass it over to admin staff because the bulk of it was dates on and off site and so on.

It only finished in mid 1999 so not that long ago

 

[Julie.]

It only finished in mid 1999 so not that long ago

Ah, mid 80's for me, after that I didn't deal with that sort of thing, so my memories of it are way back.

Didn't realise it went on so long though

 

[kropaske]

does anyone know what’s best to do and how long does this take.

You need to register for self assessment online to get your utr number. Thus may take up to 10 working days. Then you have to register for cis(as sub contractor) because main contractor operate through that scheme. He/she will then verify you and upon payments deduct 20% towards your tax payment. If they won't verify you then it will be 30% deduction. With every payment you will get voucher saying how much deduction has been made. You can't apply for gross payment as you would have to trade for minimum 12 months and earn at least 30k. Then at the end of the tax year you need accountant to file your tax return or you can do it yourself.

 

[Marti]

Found out something useful today. Although an employer is supposed to supply a tax statement under CIS most don't and none of mine ever have. I've always had to request it at the end of the year. Found out that HMRC will supply one (by post) if requested and if you have any dodgy non-payers in your work history (I do) you can still claim back the tax the employer claims to have paid on your behalf. That is even if they haven't actually paid it. They may then follow upon the debt. Can't fault the HMRC help staff. Providing you call in with all the relevant security details they will normally help. 0300 200 3210 is the magic number and I got through in about ten minutes of waiting time.

 

[Rockingit]

You can get both a UTR number and register for CIS @ 20% over the phone instantly - call the CIS helpline number and they'll step you through it.

If you're taking leave to do this then I'm rashly assuming that's paid leave, so in effect you'll be earning twice in the same period. Therefore, at some point in the future a tax return will land on your mat - this is a good thing and not to be scared of - you declare your PAYE earnings (the new online ones already will have your PAYE tax and NI entered automatically anyway) plus your extra money from this job. Then, and this is the good part, you get to enter all your legit business expenses for the YEAR, not just this job, along with the CIS 20% deduction (so say you earned a £1000, you'll have actually received £800 and the £200 is deducted - you declare the £200) and then you'll almost certainly get a bunch of dosh back off the Government as an overcharge on your tax.