Self Employed But Contractor Wants To Take Tax At Source

[Bilgeman]

I am self-employed as a painter and decorator and am doing some work for a contractor who says he has to deduct tax from my wages. I'm a bit concerned about this because this is my first job this tax year and I imagine it will be an emergency tax code which will mean paying a lot more than if I was employed and had a code. I realiseI will get this back eventually but could do without it being taken off me now, I understood that, as a self-employed person, my tax affairs were my own responsibility and I wonder if anyone could throw some light on what is supposed to happen in a situation like this. Thanks in anticipation

[rebel11]

Hi bilge

 

This has been flagged up for you.

 

The guys will be happy to advise as soon as they are available.

[Bilgeman]

Thanks - appreciate that

[IdaInFife]

My OH occasionally works as a subbie and the company he is working for always deduct the tax, I think it is dependant on what your contractor terms are.

[jdes26]

Cis 4- utr- 20% deduction

[Bilgeman]

Thanks Folks. So long as it's the usual way of things it's fine

[andydd]

Surely it will depend on the contract between you and him ?

 

I would of thought that if he is employing you on a PAYE basis then other things would come into pl;ay too, holidays, sickness, etc

 

Ive done both kinds of work, PAYE and self employed (or the similar self employed but using an umbrella company who do the tax) but its always quite clear before you start.

 

Have you a contract with the contractor, are you clear its on a PAYE basis ?

 

Andy

[Gbarbm]

Hi

If the contractor is carrying out a contract within the Construction Industry Scheme (CIS) then he has a responsibility to deduct tax at source (usually 20%) less labour and material costs.

You should receive a payment advice from the contractor which you include on your SA return (self employment page)

If the total amount you receive in the year from self employment is below the small earnings exemption (SER) you don't have to pay NI, otherwise, you pay class 2 NI and if your self employment exceeds a certain amount (sorry can't remember of top of my head but google Class 4 NI rates) then you pay Class 4

[frank fist]

So employed or not or through a cis all confusing no doubt

[King_Prawn]

A contractor in the construction industry has to apply CIS to his subcontractor payments.

 

However, at the end of the tax year you will prepare accounts and a self assessment tax return and the CIS the contractor deducts willbe taken off any tax liability you have. In most cases, if you have kept proper records of your expenses, you will probably receive back a decent sized tax refund!