Should CIS deductions be made?

[Clive]

Assume:

A is a self employed handyman. B is a self employed handyman.

If either does any work, they invoice the client and are paid gross (taxed by self assesment)

A&B work togther on a larger job and so equal work. A invoices the client and is paid, and then given cash/cheque to B for his labour.

Am I right in assuming that this is not permissable, and that in this case B would be classed as a subcontractor to A? Hence A would have to make CIS deductions?

Would there by anyway around this? Both invoice client seperately? or other?

[Dave Jones]

Providing that he provides A with an invoice for his labour this is ok

The only downside to the current way is that A is paying double the CIS payments.

So currently if A+B does a £1000 job, A gets paid £1000 - CIS=£820, and B invoices A for £500 Leaving A with £320

So on the next job B gets paid, and A invoices B that way you'll share the CIS burden

[Rick]

Agree with client that client will pay 2 invoices, each of 50% of the total.

In the past I have paid a main man for his time + all materials, and paid others helping on the job simply for time.

Rick