Subbies & taxation

[Diamond Pool Finishers]

If you do a job for a builder, labour only for £1000.00 tax is £200 ok, then if you were paying someone half of the money from the job less tax, ie his £500 less tax then he would have £400, how much would you have left? thoughts please ?:smilewinkgrin:

 

[peteablard]

£400???? or is this a trick question?

 

[Tony73]

you pay 20%tax in any way, so you have your £400

 

[Tony73]

I mean you pay 20% tax ones

 

[John Benton]

£300 I worked out, so you are getting £100 less than the person you are working with. Surely though the tax is on the £1k which is £200 you would not pay the tax twice on that initial £1k.

 

[Dougs Third Go]

or you could just scratch your head and say "it'd be easier in cash!":lol:

 

[nybor62]

its too late im on stella

 

[widler]

You would have £400 obviously,if you have less you have lost out and done it wrong

 

[Andy Allen]

depends on weather you agreeded half each before or after tax, if your the subbie then the builder would pay you less tax you then split the money in half, and you pay him less tax.....i think.....lol........my head hurts now !!

easier to just get the builder to issuse 2 cheques for each of you £500 each less the tax..

 

[John Benton]

depends on weather you agreeded half each before or after tax, if your the subbie then the builder would pay you less tax you then split the money in half, and you pay him less tax.....i think.....lol........my head hurts now !!

easier to just get the builder to issuse 2 cheques for each of you £500 each less the tax..

Thats exactly what I mean Andy, You both do the same job but you are paying tax on the same income twice, which can't be right. Thats how you end end up with less than the bloke who's working for you.

 

[peteablard]

If you're doing the job and you have subbys working for you then really you should be registered for gross payments, (if that's the way you're looking at Dave) Otherwise the money would get taxed twice however this can be claimed back at the end of the year according to HMRC

 

[beanz]

Surely if you have a job for £1,000, get the other tiler to invoice you for £500. That will then be an expense, and will be subtracted before tax. You then pay tax on what's left. 😉

 

[peteablard]

It's not just an expense though you'd be paying someone and therefore you should be deducting their tax.......I think!

 

[beanz]

It's not just an expense though you'd be paying someone and therefore you should be deducting their tax.......I think!

When I did a tax course, which was a waste of time lol, I was told that you could use a subbie twice in a year. Anymore than that, they were to be treated as an employee... But out in the real world, it doesn't work like that. I do a lot of subbie work, and different builders work in different ways, because that's how their accountants say to do it. The guy I'm working for at the moment likes to be invoiced, so he's not paying the tax, the one before used to pay the tax on the whole lot, then transfer my wages into my bank account, and I'd pay tax on that separately.. The one before that would get the customer to pay me directly, or pay me cash!?!
All I know, is I'm paying the tax on what I receive, so I should be ok.. If they're doing it wrong, it's between them, their accountants, and the tax man. 😉

 

[Diggy]

HM Revenue & Customs: Are you a contractor or subcontractor under CIS?

 

[Alan.P]

If your invoicing for the job and then paying someone else you have a whole new ball game, you have to stop their tax out of their invoice which they then claim back and that you have to pay to hmrc but it's more involved, that's the jist of it at least, at least that's how my Brothers bookkeeper said it was ?