companys refusing to pay CIS?

[einstein]

either umbrella or limited company?

Anyone know why?

 

[grantr37]

A few years back, the Inland Revenue wrote to the Agencies in regards to false self employment.
Basically they told the Agencies that if it turned out they were paying workers a self employed when they should be treated as employed, the Agencies would have to pay any tax and NI owed.
Most of the Agencies then decided everyone would be PAYE or Ltd. they didn’t want to risk being caught out.
Some Agencies continued to pay CIS, and those are the only ones I will work for.
I did get caught out at the start, I started work for an Agency just before the new tax year, as far as I was concerned being paid CIS. However when I got paid I had been charged tax, NI and employer’s NI contribution.
I refused to sign the new contract the Pay Roll company wanted me to sign. The existing contract said I would be paid CIS.
Eventually I left to work for an Agency which would pay CIS.
At the end of the Tax year I just declared the deductions made as CIS tax paid.
The Pay Roll company told me it was up to the Agency to decide whether I was PAYE or CIS. Strange as I was the one paying the Pay Roll company a fee for them to pay me, not the Agency.
I asked who was employing me, apparently no one.
I never agreed with anyone to be paid PAYE and strangely, I never received a P45 or P60 detailing any of the tax or NI deductions.

Check that they actually passed on your tax and double dose national insurance or you might end up with a demand letter from the tax, I hope you kept the wage slips as if they didn't pass on the money and the tax office come asking you'll be knackered, if you can prove tax was taken and not passed on, they are quite good at closing the case and you may well even get a tax refund as you were proven not to be at fault.

 

[Adam W]

I've got no idea either!

I agree.

 

[uksrevivor]

All this umbrella company crap needs scrapping. employment agencies offer a rate on an hourly basis and then you find out that you have to pay the umbrella company to process your wages which is about £20 per week, this over a 40 hour week drops your rate by 50p an hour, you then have to pay employers NI contributions as well as your own NI, and if you want holiday pay you pay for it at about 12% of your weekly income. The hourly rate that agencies pay is not the actual rate you will finally get payed. Total rip off at our expense I hope it gets scrapped sooner rather than later as it is just not right.

 

[Deleted member 26818]

There are four methods agencies pay their workers.
CIS. Payment through a Pay roll company, their fee (£15 - £25) is deducted, followed by the 20% CIS tax. Your expenses are then claimed at the end of the year through Self Assessment.
Ltd Co. Payment shouldbe direct from the Agency to your Ltd Co. with the 20% CIS tax deducted, though some Agencies pay through a Pay roll company which again deduct their fee followed by the 20% CIS tax. How you pay yourself from the Ltd Co. is then up to you.
Umbrella. Payment through a Pay roll company, their fee deducted followed by holiday pay, Employer’s NI and then your NI and PAYE tax ( not sure of the exact order of deductions). Most will allow you to claim weekly expenses before deducting tax and NI, though what and how much they will allow varies. Accumulated holiday pay is claimed as and when or when your employment ceases.
PAYE. Agencies pay you direct and deduct holiday pay, PAYE tax and NI. Your expenses are claimed at the end of the year through Self Assessment. Accumulated holiday pay is claimed as and when, or when your employment ceases.

 

[elsparko]

All this umbrella company crap needs scrapping. employment agencies offer a rate on an hourly basis and then you find out that you have to pay the umbrella company to process your wages which is about £20 per week, this over a 40 hour week drops your rate by 50p an hour, you then have to pay employers NI contributions as well as your own NI, and if you want holiday pay you pay for it at about 12% of your weekly income. The hourly rate that agencies pay is not the actual rate you will finally get payed. Total rip off at our expense I hope it gets scrapped sooner rather than later as it is just not right.

depends which agency, last big contract i was on was 22.50 an hour for agency sparkies, sjib rates for boys on the books

 

[Matt]

A few years back, the Inland Revenue wrote to the Agencies in regards to false self employment.
Basically they told the Agencies that if it turned out they were paying workers a self employed when they should be treated as employed, the Agencies would have to pay any tax and NI owed.
Most of the Agencies then decided everyone would be PAYE or Ltd. they didn’t want to risk being caught out.
Some Agencies continued to pay CIS, and those are the only ones I will work for.
I did get caught out at the start, I started work for an Agency just before the new tax year, as far as I was concerned being paid CIS. However when I got paid I had been charged tax, NI and employer’s NI contribution.
I refused to sign the new contract the Pay Roll company wanted me to sign. The existing contract said I would be paid CIS.
Eventually I left to work for an Agency which would pay CIS.
At the end of the Tax year I just declared the deductions made as CIS tax paid.
The Pay Roll company told me it was up to the Agency to decide whether I was PAYE or CIS. Strange as I was the one paying the Pay Roll company a fee for them to pay me, not the Agency.
I asked who was employing me, apparently no one.
I never agreed with anyone to be paid PAYE and strangely, I never received a P45 or P60 detailing any of the tax or NI deductions.

Is it possible for you to suggest some companies that use CIS instead of Umbrella or CIS Umbrella?

 

[Deleted member 26818]

Fast track, Diamond, Pier, to my knowledge.
BMSL, will on occasion pay CIS, though they seem to mostly pay Umbrella.
To be honest, any of them can pay CIS, you just need to check with them when accepting work.

 

[Matt]

Fast track, Diamond, Pier, to my knowledge.
BMSL, will on occasion pay CIS, though they seem to mostly pay Umbrella.
To be honest, any of them can pay CIS, you just need to check with them when accepting work.

Thank you mate.
I asked you because the ones I called all assumed that I want to work through an Umbrella in the first place and it gets frustrating after a while when you like the details of a job, like the pay and then you get told you need to register with some people that supposedly will "handle" your payroll and bite a freaking 1/4 in useless payments off of your days work. And the most annoying part is that there is often little room for negotiations, like when you get told that you need to use their Umbrella that takes 100GBP per month instead of another one that you found on the internet for just over 50 GBP...

Oh my, I guess I went on a bit of rant here

 

[Deleted member 26818]

My experience, is that all Agencies now use payroll companies.
Most will want you to use their payroll company, though many will allow you to use another.

It’s not so much that they assume you want to work through an Umbrella scheme, it’s more that they prefer it if you do, to limit their liability if it turns out in the future that they allowed CIS when they shouldn’t have.

Even with a Ltd Co. some of the Agencies are now insisting a payroll company is used.

 

[Matt]

Ah. So they are just trying to cover their backs because of a government crackdown. Briliant... Good job uk gov

 

[Moto]

2020 is the year that companies cannot use subcontractors going through there own ltd companies in the private sector.
Some Agencies now state umbrella only.

 

[Nigel]

The reason companies do not pay CIS is because it is illegal to employ someone on a long-term labour only sub-contract

 

[Moto]

The best way round 1R35 is to work for more than 1 company per year.

 

[Nigel]

The best way round 1R35 is to work for more than 1 company per year.

That is a myth unfortunately. If you are not purchasing materials or not responsible to correct faults and snags out of your own pocket you are classed as employed and should be PAYE. It makes no difference how many companies you work for.

 

[Deleted member 26818]

That is a myth unfortunately. If you are not purchasing materials or not responsible to correct faults and snags out of your own pocket you are classed as employed and should be PAYE. It makes no difference how many companies you work for.

It’s not being PAYE, that’s an issue.
It’s this bogus PAYE that the agencies want us to take, where, we aren’t employed by anyone, and we have to pay the employer’s NI contribution.