I wonder if anyone could help me out with the following questions:
My Husband is a self employed, sole trader, subcontractor in the construction industry, I always do his accounts and have done for years.
He has subcontracted for the same firm for 29 years and for quite a few years now has had the CITB levy deducted @1.5% from his gross pay before income tax was deducted
EG: £1000 gross - (1.5%Levy)£15 = £985 - (20% tax)£197 = £788 net: therefore tax taken from the reduced gross(after levy deducted).
Recently they have been taken over by a new firm, they have changed their pay advice slips and they have been deducting the CITB levy from the gross amount as before but not using the reduced gross to calculate the income tax.
EG: £1000 gross -(20% tax)£200 = £ £800- (1.5%Levy)£15 = £785 net: therefore tax taken from the gross (before the CITB levy taken off)resulting in paying more tax.
Surely this is wrong?? I'm pretty sure the levy should be taken from the gross and the tax calculated from the reduced gross (the way they used to do it) Is that correct?
The next thing I wanted to ask is about the new payslip itself:
They are deducting the levy but have not mentioned it anywhere!!
Just looks like this:
EG: Gross:£1000 Tax:£200 Amount Paid: £785
It obviously doesn't add up on the payslip! It's only because I know that they take CITB Levy at 1.5% that I can work out why the net doesn't equal the gross - tax but to anyone else they wouldn't know where they difference came from.
Again surely this can't be correct to make a deduction but not show what it's for?? Is it even legal??
lastly, The CITB Levy? from what I've managed to find out HMRC doesn't support the recoup of the Levy through subcontractors? I'm pretty sure my Husband shouldn't be paying it, He is not VAT registed and is Labour only.
Sorry for bombarding with so many questions at once but I want to make sure I have the correct Informaation before I go in with all guns blazing!
Thanks for taking the time to read my post, looking forward to learning more from your replies.
Edited at 19 Sep 2016 07:17 PM GMT
Edited at 19 Sep 2016 07:19 PM GMT