Residential plumber - CIS

Does residential plumbing fall within CIS ?

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2 self employed plumbers, both work for private / residential / domestic customers.

1 of them has too much work - the other not enough.

if one plumber uses the services of the other, is the payment liable to deduction under the Construction Industry Scheme ?

Thanks

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By airgeadagam
05th Jul 2018 19:14

Construction Industry Scheme (CIS)
Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC).

The deductions count as advance payments towards the subcontractor’s tax and National Insurance.

Contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they’re not registered.

If you’re already registered as a contractor, you can sign in to CIS online to file your monthly returns or to verify a subcontractor.

Who counts as a contractor or subcontractor
Register as a contractor if either:

you pay subcontractors for construction work
your business doesn’t do construction work but you spend an average of more than £1 million a year on construction in any 3-year period
Register as a subcontractor if you do construction work for a contractor.

You must register as both if you fall under both categories.

Thanks (1)
JCACE
By jcace
05th Jul 2018 20:52

If the payment to which you refer is from one plumber to the other for labour within the construction industry, then it will be subject to CIS. The subcontractor could always apply for gross status, if eligible.

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By Wanderer
05th Jul 2018 21:04

OP
First you have to decide whether it's 'Construction Operations':-
http://www.legislation.gov.uk/ukpga/2004/12/section/74
Then you have to look at the status of the 'other' plumber to establish what / whether deductions have to be made.

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Replying to Wanderer:
RLI
By lionofludesch
06th Jul 2018 08:39

Wanderer wrote:

OP
First you have to decide whether it's 'Construction Operations':-
http://www.legislation.gov.uk/ukpga/2004/12/section/74
Then you have to look at the status of the 'other' plumber to establish what / whether deductions have to be made.

I would say you do this the other way round.

First, is he an employee ?

Second, do I need to deduct CIS tax ?

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By Marion Hayes
06th Jul 2018 09:52

Wouldn't it be simpler for householder to pay other plumber direct?
It removes CIS complications and keeps the turnover down to reflect the work actually done.

Thanks (2)
Replying to Marion Hayes:
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By Matrix
06th Jul 2018 16:39

The contractor could charge the subbie plumber out at a higher rate so make a margin.But yes he would need to see whether it is worthwhile having to monitor the VAT threshold and operate CIS.

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paddle steamer
By DJKL
06th Jul 2018 17:56

Why does plumber A not charge plumber B a referral fee for each introduction, plumber B then charges the customer direct. Yes there is a risk of loss of business in future for plumber A if regular customer reverts to using plumber B but that risk exists via sub con route anyway.

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