Construction Industry Scheme for little people and little jobs?

[Jennie]

Hiya,
I could do with some advice about the CIS scheme. I just called their helpline and they were useless.
I'm setting up as a self-employed plumber, and will be teaming up with other plumbers on two-person jobs - just odd days here and there, replacing baths, etc. Technically, the customer's contract will be with me, and I'll be subcontracting the other plumber.
Under the scheme, I'm supposed to register both myself and the other plumber, and withold their tax. It's a massive pain in the a...
My question to CIS was whether the scheme applies to the self-employed with very small turnovers. Their guidelines suggest exemptions.
I'd like to make sure I keep my tax paperwork in order, to avoid complications down the line.
How do you all get round it? The other plumber has asked to be paid in cash - how do you diplomatically ask the customer to pay in cash?
Jennie

 

[basildog]

Avoid it like the plague !
Easiest way if you want to be above board and honest is to get the customer to pay the other contractor direct presuming they are domestic customers and not builders ?
You could do it in a way that you barter as in trade work where no money changes hands also if you do work for the others ?

 

[Mrs Tara Plumbi]

No don't avoid it.
It is a pain to set up at first but once you are up and running it is easy to administer and it will make you keep your records straight on a monthly basis - making it easier for end of year accounts.

Paying your subcontractor in cash: No problem how you pay him just keep a record get him set up for CIS then you can deduct 20% (or 30% if HMRC tell you).
I would be surprised if many customers want to pay cash, though a few may offer. Bank transfers straight into our bank is becoming normal - and very convenient.
I wouldn't ask the customers for cash.

I guess you have found all the info on the HMRC website: HM Revenue & Customs: Construction Industry Scheme

 

[basildog]

No don't avoid it.
It is a pain to set up at first but once you are up and running it is easy to administer and it will make you keep your records straight on a monthly basis - making it easier for end of year accounts.

Paying your subcontractor in cash: No problem how you pay him just keep a record get him set up for CIS then you can deduct 20% (or 30% if HMRC tell you).
I would be surprised if many customers want to pay cash, though a few may offer. Bank transfers straight into our bank is becoming normal - and very convenient.
I wouldn't ask the customers for cash.

I guess you have found all the info on the HMRC website: HM Revenue & Customs: Construction Industry Scheme

I know what you are saying but for a one man band with small jobs and limited funds it is yet another admimistrative nightmare !
I have run a firm with a very decent turnover and did all the correct things regarding tax ,pensions etc .
As for customers not wanting to pay cash I think we hardly ever had one who did not try !
The richer they are the worse they get I have found but they all try from accountants through to police officers .
Thats before they start to offer the guys on site cash to come in and do little jobs for them on the side !

 

[Mrs Tara Plumbi]

As for customers not wanting to pay cash I think we hardly ever had one who did not try !
The richer they are the worse they get I have found but they all try from accountants through to police officers .

That's interesting.
We don't ask for cash we just ask how people would like to pay and very rarely get offered cash even for little jobs. I think people don't deal in cash anymore but obviously your experience is different.

Admin- yes I hate it and I think small businesses are over burdened with it.
If the work with others is very occassional and for small sums you could probably get away with no going CIS route - even though rules is rules.

However, if it is quite frequent every month I don't see any point in avoiding it because ultimately you do have to keep those records and prepare some sort of annual accounts, CIS just makes you do that bit monthly.
What I think is really bad is the penalty if you miss the 19th deadline (£100?). I have missed it a couple of times and it is always worth appealing on the grounds of ill health or something - as my appeals were accepted.

 

[Worcester]

Better to register and sort it out now than have HMRC on your back later.

If you are primarily working with one guy as your subby, then after the first month it really is quite simple, and he won;t have to worry so much about how to pay his tax bill later either.

Also watch rules to see if he is actually a subby or you are deemed to be employing him... (CIS or not..)

 

[stevetheplumber]

if you pay him as a subby youll need diferent public liability insurance as well you sole trader policy will not cover even you