I work in the construction industry and want to be self-employed. How do I become registered under the new Construction Industry Scheme (CIS)?
It is FREE to apply for CIS status with HMRC. If you’re intending to work within construction you’ll want to register before you start doing so. If you don’t register, deductions will be made from your payments at the higher rate (30%).
You can register by calling the HMRC CIS Helpline on Tel 0845 366 7899 (8.00 am to 8.00 pm, seven days a week). You will be asked for your name, address, date of birth and your Unique Taxpayer Reference (UTR).
What tax deductions will be made from my pay?
When you provide Universal Payroll Services with your UTR number, we will contact HMRC to verify your CIS status. This will determine the rate of deduction made from your gross pay. Most subcontractor deductions are made at 20%. In certain circumstances CIS subcontractors will be verified for 0% (gross) deductions. If HMRC cannot match your details under CIS, you will be deducted tax at 30%
Do I need to pay National Insurance (NI)?
Yes. If you are self-employed you must keep up with your Class
2 and Class 4 National Insurance contributions, For the 2012/13 tax year they are payable at a flat rate of £2.65 a week for Class 2 and 9% on profits between £7065.00 to £42475.00 plus 2% on all profits above that for class 4.
Can I claim expenses as self employed?
Yes. You can claim your business expenses annually when you,
or your accountant, complete your Self Assessment Tax Return. Remember, you must keep your expense receipts for up to
six years in the event that HMRC wish to enquire into your tax return.
Will I receive holiday pay if I am self employed?
When you are self-employed you take responsibility for your
own holiday pay arrangements. Most agencies will agree a rate with you that includes holiday pay in accordance with the Working Time Directive legislation.