Your employment status, within the construction industry, can often be very confusing, deciding whether you should be classified as CIS (self- employed) or PAYE (an employee).
When being hired, it should be made quite clear to you what your terms of employment are. When you’re working for someone else, you need to know your employment status and HMRC have a guide on their website to help you establish whether you’re classed as self-employed or PAYE.
The guide doesn’t take long to complete, but if you are at all unsure, we, at Bettertax, are quite happy to assist you.
This applies to construction workers who are self-employed. Due to the nature of the construction industry, many workers in this sector are hired on a subcontractor basis, getting paid for when they work but not being required when a job finishes.
Being self-employed does give flexibility. To work in this way, you need a UTR (Unique Taxpayer Reference) number. Your contractor can then pay you and deduct 20% tax (instead of 30% with no UTR). Your UTR number can take a few weeks to come through, so as soon as you know you will be self-employed, contact your local tax office or ask us to help you!
At the end of the tax year, you can complete a self-assessment tax return in order to claim back any tax that you will have invariably overpaid – offsetting personal allowances and allowable, eligible expenses.
We know how confusing all these processes can be so, part of the tax refund service Bettertax offer is supplying all the forms you need to register as self-employed, obtain a UTR number and set up National Insurance contributions.
Our tax advice is always free, we’re happy to help!