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Howard Royse explains why the deduction of tax at source from workers’ invoices, as required under the construction industry scheme (CIS), should not be expanded to other industry sectors.
Discussions following the Taylor Review, and the problem of defining the self-employed status of some workers, have generated a number of proposals. One of these is the suggestion that principle of tax-deduction-at-source should be borrowed from CIS and applied to other industries.
However, before running with this idea, I strongly urge you to consider the cost that the construction industry bears in administering CIS.
Lies and twaddle
“The cost of CIS can’t be all that much, surely?” That was the attitude of HM Treasury when it assessed the cost of the old CIS prior to the introduction in 2007 of what is the current scheme. The Treasury reckoned that the old scheme cost industry £52m per year, but that the new improved scheme would only cost £30m per year
Remember, being self employed means being more responsible for keeping accurate records for preparing your accounts. Always keep your receipts and invoices in an orderly manner such as a folder or file. This makes it easier come the end of the year when handing it all over to your accountant, because it speeds up their job and as such, decreases the value of the invoice they hand back to you for their services!
For more information from HMRC regarding this, please click on the button below.