CIS the facts
New CIS legislation is making it tough for contractors to remain “self-employed” and workers on CIS cards that are deemed ‘Employed’ are converted to PAYE. As a result the company/end user may have to convert the worker to employee status – and may receive a hefty fine! The worker then takes home less money while the company has to make Employers NI contributions of 12.8%, as well as taking employment liability. Moreover the new Working Time Directive or Holiday Pay adds to the problem and the company can also be liable for an additional 10.17% of income to each worker.
Engaging sub-contractors via TEAM CONSTRUCTION puts a “firewall” between contractors and sub-contractors. There can be no claim for Holiday Pay. The Inland Revenue cannot reclassify the sub-contractors as PAYE and CIS admin and payroll overheads are drastically reduced. There are no minimum numbers – and it will even save your clients money!
Contractors responsibilities:
- ensuring workers have self-employed status*
- verifying each worker’s UTR number with the Revenue*
- converting workers not deemed self-employed to employee status*
- making monthly declarations to the Revenue for each sub-contractor*
- deducting tax from sub-contractors salary*
- making NI contributions of 12.8%*
- sickness and holiday pay