We are CIS contractor - received one off labour invoice, but no UTR?

We are CIS contractor - received one off labour...

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We are a registered CIS contractor and as such pay all out sub-contractors through the scheme deducting tax at source.  We have received 2 invoices from someone who is not registered as self employed and they have been advised they do not need a UTR number as they are in employment and this work was a one off.  I have received conflicting advice as to how to treat the invoices.  I thought we were bound to pay everyone through the CIS scheme also anyone undertaking work outside of employment technically should be self-employed?

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Euan's picture
By Euan MacLennan
10th Jul 2013 11:23

Deduct 30% CIS tax

If you are a CIS contractor, you must be aware of the requirement to verify each new sub-contractor with HMRC.  If they are not registered for CIS (and if they are not even registered as self-employed, they cannot be registered for CIS), you will be told to deduct CIS tax at 30%.

The only alternative would be to take the "sub-contractor" on as your employee and deduct income tax at 20% on PAYE code BR M1 for an employee with another job and possibly, NIC.

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By Paul Soper
10th Jul 2013 11:27

Don't forget

income tax at 20% plus NIC at 12% and pay an extra 13.8% on the top.  If they acted as a subcontractor pay them through the CIS scheme as Euan suggests - you will be in breach of the monthly declaration if you don't...

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By carolina
10th Jul 2013 11:38

CIS

Thank you, this is what I told the sub-contractor and his employer, but I received a very abrupt response - his accountant got quite aggressive and implied I was being difficult!  She told me she had spoken to HMRC and it was down to our discretion whether we paid the invoice as is. I am happy that I have followed the rules and grateful for responses.

 

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By Paul Soper
10th Jul 2013 11:45

"and his employer"

You say you told 'the sub-contractor and his employer' and their (?) accountant got quite aggressive too...

Just out of interest what was the nature of the services for which the invoice was issued, was it issued by the employee, or his employer and to whom was it payable?  This all sounds a bit odd to say the least.

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Euan's picture
By Euan MacLennan
10th Jul 2013 11:49

Another thought

If you have been discussing it with both "the sub-contractor and his employer", the employer appears to be involved in the arrangement, so another solution would be for the employer to raise the invoices and for you to verify the employer and deduct CIS tax accordingly.

However, it all sounds a bit devious to me.  I would just deduct 30% CIS tax from the payment to the individual.

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By jjswjjsw
10th Jul 2013 23:02

Does the work come under CIS

Agreed this sounds strange, does the work done for you actually come under the scope of CIS as there are a few areas when you don't have to apply the CIS rules. 

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