I've taken on a new client who changed from being self-employed to forming a limited company a couple of years ago. Their first set of accounts and CT return are overdue so I'm trying to put everything together as quickly as possible. But I'm feeling a bit uncertain about the gardening services they are using outside workers to complete. I believe they are all self-employed and are paid "now and then" as the work is available (perhaps in winter months there is less available).
Two questions...
1. Where should the cost for these workers be posted? Cost of sales?
2. In this situation, should the IR35 rule be considered?
Replies (6)
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Assuming they aren't employees, they'll be subcontractors and I'd put them under cost of sales.
IR35 is irrelevant unless the subcontractors use PSCs.
IR35,no.
But CIS , yes.
Just in case overlooked.
You say you believe that they're self employed.
The CIS process should not be disregarded .
Has client undertaken tax compliance checks?
https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-re...
Ordinary gardening should be OK
"Now and then" Like it: hides a multitude of sins.
Just get the "now and then's" to invoice for their work.
Even if only 'now and then'.