I had a meeting with a builder yesterday about CIS and Sub-contractors etc..
Basically, the Main contractor will pay only one cheque to "gangleader 1" a lump sum, less CIS. So for EG £10,000 less £2,000 = £8,000.
Now "gangleader 1" will pay Subbie 2,3,4 say £1,000.
Now I say he should take CIS from Subbie 2,3,4 of £200 so paying out actually £800 and he sends £200 CIS to HMRC.
He says that there is "a letter from HMRC "knocking" around which says that "gangleader 1" does not need to deduct CIS from 2,3,4 as it's all in the £2,000 from main contractor....
Have I missed something? I know it kind of looks like CIS on same money twice, but everyone get's it back at the end..
Many thanks in advance.