Contractor Paying My Tax? - Tile Advice

[Martino]

Hi I'm not sure which forum to put this question in but...I've got a few months work through a friend who knows a contractor at a modular site.....all I do is tell the guy my UTR number and he sorts out my tax and n.i..... Question is....how can I be sure he actually pays it? Also what do I declare on a tax return with regards to this?...I have always paid my own tax...any help would be much appreciated

 

[John Benton]

The money paid by the contractor to HMRC will be lodged against your UTR so at the end of the year when your tax bill is worked out it will be minus what is already on account (In laymans terms)

 

[Martino]

Cheers John....that makes sense when you think of it like that.

 

[John Benton]

BUT be careful, make sure that it is paid to your UTR. I had an instance where the showroom I was contracting to was deducting the 20% of my labour charge and pocketing it. When my accountant sorted my tax out there was no money on account and I had to prove that the invoice I sent was different to the amount actually received, which was easy, so HMRC then go after the contractor rather than me. Bit of hassle but if you have a paper trail then it should be no problem if it happens to you.

 

[Martino]

Cheers for the advice pal its only for a month or so. So like you say worst case I will easily be able to show that my Invoice is different to what I received...I am currently not CIS registered.......is this a must?

 

[John Benton]

I don't subcontract but I understand you should be CIS registered, I'm sure one of the other guys will confirm either way

 

[One Day]

Not necessary. Just call your tax office and explain. They'll sort it out. Takes a few minutes. Easy really.

 

[dave l and l]

invoice him and a get a receipt from him saying how much job was and how much tax was paid in under your u t r number
than at end of year give it to your accountant and they will minus it of the tax owed,
i do it for a couple of shops / showrooms i do work for

 

[Spare Tool]

The contractor should issue you with a payment certificate showing deductions after each payment or at least at the end of the month, and if they don't offer one ask for it..

 

[hmtiling]

Yep, as above. contractors are supposed to issue sub contractor monthly statements.

 

[Dean Robertson]

If you're not CIS then the contractor takes 30% tax. If CIS it's 20%. The difference will be repaid to you at end of financial year.
I think some contractors may request that you be CIS so worth sorting it out.