CIS and tax

CIS and tax

Jun 21, 2018

The taxation treatment of self-employed individuals changed on 6 April 2014.

As a result, any self-employed individual who provides their services via an intermediary such as a recruitment agency or a contracting company like Crest Plus must be treated as employed for tax purposes if anyone exercises control, supervision and direction over them or has the right to do this.

What is more HM Revenue & Customs work on the presumption that this will always be the case, unless evidence can be produced to prove otherwise. If the self-employed worker is treated as employed for taxation purposes, this means that income tax and national insurance must be deducted at source under PAYE.

In almost every case, that obligation will fall on the recruitment agency involved. For this reason, some recruitment agencies refuse to allow self-employed individuals to be engaged on some of the projects they are involved with.

Unfortunately, if and when that happens, CIS will not be available to you. However, our Umbrella and Limited Company propositions may provide attractive alternative ways for you to undertake the work in question.

In order for you to work on a self-employed basis, through our CIS solution, you must first answer a series of questions which are designed to help both you and us form a view as to whether you satisfy the necessary requirements to be able to work on a self-employed basis. It is important that the answers you give to these questions are complete, accurate and honest in all respects, because there can be adverse consequences for you, us and others if that is not the case. You can answer those questions either over the telephone or online.

Many of our self-employed subcontractors, working through CIS, find it most convenient to answer these questions online. However, if you have any difficulty understanding the questions or would like to discuss your proposed answers with us then by all means call us on 01244 684700 during normal working hours and we will be happy to help.

To work on a self-employed basis in the construction industry, you must be enrolled in the government’s Construction Industry Scheme (CIS) and hold valid net or gross CIS status (the old CIS4 or CIS6). If you already hold net or gross CIS status, then we will take the appropriate steps to ensure that this is verified with HM Revenue & Customs as quickly as possible, so that we can pay you as and when we engage your services.

If you do not hold valid net or gross CIS status you will need to obtain this. This can be done by you online on HM Revenue & Custom’s website.

Our aim is to ensure that we always comply with all relevant laws. By doing this, not only do we protect ourselves, but we will also protect our subcontractors, suppliers and clients.

Unfortunately, we work in an industry where some operators have a reputation for taking a ‘relaxed’ attitude to compliance. At Crest Plus, we take compliance with the law seriously and strive to ensure this is the case.

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