A self employed builder client has used the odd amount of labour throughout the year, from an agency. He has only paid a total of about £1,500 over the year.
The client does not have a CIS / employer scheme – should he ?
He simply receives an invoice from the agency for the hours worked by the labourer. Does the agency sort out PAYE or CIS ?
John Hughes
Replies (2)
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CIS
as per HMRC CIS manual:
Rules for agency workers
Special rules apply to agency workers who normally treat the worker as an employee for tax and National Insurance contribution (NICs) purposes. The business paying the worker should normally deduct tax under PAYE and account for Class 1 NICs. Very exceptionally, the special rules for agency workers do not apply and any payments for construction work will fall within the Scheme. The agency will then be a contractor and will need to fulfil its obligations in that role.
CIS
Your client still needs to verify the agency as per the new CIS rules and therefore he needs to register as a contractor on the CIS scheme. The agency labour is employed by the agency and therefore the agency is responsible for the PAYE/NI. Your contract is with the agency.