If you are self employed, you are probably already registered with HMRC as self employed.
If not, then that’s your first step.
Second step is to register for CIS.
The Construction Industry Scheme, operates by whoever pays you deducting 20% Tax from your money, which you declare as tax paid when you do your self assessment.
The CIS people will send you a UTR number.
The Unique Tax Reference number is to be given to whoever pays you and they have to check with the CIS people to ensure you are registered and how much tax they should deduct.
If you do not have a UTR number or if it cannot be verified the tax deducted is 30%.
After one year registered as CIS, you could apply for zero % tax. That way whenever someone verified your UTR number, they would be informed of your zero % tax status and nothing would be deducted.
Signing up with agencies is pretty straight forward, phone them, email a copy of your passport, JIB card, qualifications and other certificates or cards.
If you are offered and accept work, you will be paid through a Payroll company.
They will need to be told your UTR no, bank account details and will probably want a copy of your passport.
The payroll companies pay you by either of two methods.
CIS where they will first deduct their management fee, then deduct the tax and pay you what is left over.
Umbrella/PAYE where they will first deduct their management fee, deduct tax NI and employer’s NI and pay you what is left over.
It is the agencies which decide whether you should be paid CIS or Umbrella/PAYE.
There are two other methods of being paid.
Ltd company where you invoice the agencies (some will do this for you), the agencies then pay your Ltd Co direct, after first deducting any tax.
The Ltd Co must first register for CIS and will be issued a UTR number.
PAYE, on some Government projects such as Cross Rail, the agencies will employ you direct.
They will deduct PAYE tax and NI and pay you what is left over.
They should allow you to claim expenses, such as travel, subsistence, laundry, etc and any expenses should be accounted for before tax and NI is deducted.
There are many methods that agencies will prevent you from claiming expenses.
Contract stating the work is a fixed term, contract stating you are employed from site, pluss others I don’t know about or just blatant refusal to process any claims for expenses. This means you will have to claim the expenses through self assessment.
I don’t accept work if it is to be paid Umbrella/PAYE.
One other thing I have noted recently, is that some agencies will not pay a Ltd Co direct, they pay through a Payroll company which means you get charged the management fee.
I have recently been offered work at THFC from various agencies. PCR, OHUK, Diamond and BMSL.
PCR offered me Fire alarm installation, stating that previous experience of working at THFC would be preferred.
OHUK offered me electrical installation with a company called Imtech, would not accept workers who had previously worked at THFC and would only pay Umbrella/PAYE.
Diamond were offering electrical installation with Imtech, not sure about previous work at THFC or how workers are paid.
BMSL also offered electrical installation with Imtech, not bothered about previous work at THFC and pay CIS.
The 3 agencies offering work for Imtech are all offering ÂŁ2200 per week for 80 hours work.
The difference between BMSL paying CIS and OHUK paying Umbrella CIS will be about ÂŁ350 to ÂŁ400 per week.
In the past I have been phoned by an agency offering me work on a site I was already working at through another agency.
The work was for the same company I was already working for doing the same work. The pay offered was ÂŁ1 per hour less.
Agencies do lie.
They will offer on going work which turns out to be for a fixed term.
They will offer 3 months which turns out to be 9 days.
