As an ex HMRC employee, I have recently being doing some casual work acting as a tax agent, generally for sole traders with fairly straightforward tax affairs.
However, I have recently taken on a client who is in the process of registering as a contractor under the CIS scheme. What is a reasonable charge to submit their monthly returns in respect of this? (They are likely to have no more than 1 or 2 subcontractors working under them in any given month).
Any advice would be much appreciated.
Thank you.
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Higher
My rates are 30% or so higher than for non-CIS payroll because:
1. The penalty regime is so tough.
2. You have to verify every subcontractor, and there can be glitches.
3. You are submitting and paying monthly, not quarterly or annually.
4. Inevitably subbies are coming and going. In this sector, many of them have a "couldn't care less" approach to tax which leads to extra work. All the onus of the system falls to the contractor.
5. HMRC are pretty awful to deal with, but HMRC CIS are another step change worse than "standard" HMRC.
This all pre-supposes your Contractor is going to take his or her role seriously. In the past I had one who, for example, gave me one subbies UTR instead of the guy who did the work because he knew the second one was not verified. Any sniff of this sort of stuff and you read the riot act, I will not deal with anyone who does any of this sort of stuff.
something that has worked for me
My CIS clients know the score, some simple rules:
1. No UTR = no payment to sub-contractors. If they do it once, they get told in no uncertain times on the phone and in writing that the next time is a red card offence and I will resign.
2. For sub-contractors, I tell them that a CIS certificate in their back pocket for £200 as just as good as four crisp £50 notes in the same pocket.
3. The toughest ones are the limited company ones. Despite the fact that by repayment time HMRC has had some of this tax for 14 months, they can be incredibly awkward about paying up. I get my initial stuff off in the post on the first available day after the tax year, follow up in letter and by phone to check and double check that they see no problems with it, and that they are going to pay up. This works for me. I had a tricky one this year where my client had made an error - an undrstandable one - but we spotted it and submitted an adjustment and still managed to get the payout by the first week in July. £6k, so no small beans to a one man band building contractor in the current climate.
Be thorough and fast, and keep your clients on a short leash and the system works - just about!