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Construction Industry Scheme

Macclesfield
  • Fellow PM.Dip
  • 19 posts
  • # 75000

I have taken on a plumber as a client. He is self employed and works generally for homeowners and small businesses. He has occasionally had his son (also a plumber) help him but as far as I can see he has not used anyone else. His annual turnover is below the VAT threshhold. Should he be registered under the CIS? Do I put the payments to his son under the Contractors payments or under wages? Thankyou.


Macclesfield

Edited at 08 Oct 2011 01:12 PM GMT
kjmcculloch
  • 1159 posts
  • # 75003

As far as I can see both answers could be right.  Is the son and employee of your client, or is he a sole trader in his own right?

If he's an employee then it would be wages with no need to worry about CIS.  If he's a trader in his own right then he would become a subcontractor and CIS would come into play.

Kris 
  • 698 posts
  • # 75015

Dear All

If there is a PAYE scheme in place for the business and the son is being paid under the PAYE and having his tax and NI deducted at source and paid to HMRC then you post his wages to Gross Pay Employers NI to Er's NI etc.

If no PAYE scheme has been set up then you will need to get the sons UTR number and check his CIS status with HMRC as he may not liable for CIS deductions.

In terms of the farther again you will need his UTR number and have to check his CIS status with HMRC. If he is dealing with the general public then no CIS will apply he would be paid gross and declare his earnings for tax in the normal way, When it comes to working for other small business' it will determine what those business' are as to whether or not CIS comes into play.

So my advice to you is check with HMRC to be safe.

Kind regards
Stuart

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