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to ask whether anyone knows about UTR #s, self employed, unemployed, construction industry

(15 Posts)
ShesaidthenIsaid Mon 01-Feb-16 18:16:56

DP works in construction.
Apparently, everyone labouring etc. is 'self-employed' DP has a UTR number (Unique Tax Reference number - don't ask me what it is).

He has been out of work for the past 3 weeks. He has been told by colleagues (not English), that he cannot claim any benefits when out of work as he is registered self-employed.

I know absolutely nothing about this but we literally have 40 pounds between us until whenever......

He says tax is taken out of his wages - about 110 tax per week. He has never seen a payslip.

We're not English, so have no clue whether this is true or not.

Has anyone any advice/clue/anything?

confusedandemployed Mon 01-Feb-16 18:22:12

The tax thing is probably right, it's a scheme where building contractors pay some tax direct to HMRC on behalf of their subcontractors. He wouldn't get a payslip but he should get some sort of regular statement.

Re benefits: I don't know but you need to speak to the job centre to find out.

I hope you get things sorted.

ShesaidthenIsaid Mon 01-Feb-16 18:25:39

Thanks confused. Seems bizarre that you would pay a regular amount of tax and not be able to receive benefits? Will go to jobcentre tomorrow maybe. Really hate 'benefits'.
Thanks again.

DisappointedOne Mon 01-Feb-16 18:27:22

Benefits are based on NI contributions, not tax.

QforCucumber Mon 01-Feb-16 18:30:35

It's not tax which is being deducted - it's 20% of his salary under what is called cis deductions. He needs his payslips to complete a self assessment tax return at the end of the tax year which will then usually result in a rebate. It is correct that he is not eligible for benefits after being self employed, he needs to either notify hmrc he is no longer a sole trader or maybe call local agencies and see if there's anything available.

topcat2014 Mon 01-Feb-16 18:36:43

Under the construction industry scheme, the main 'contractor' will make a deduction (I think the rate is 20%) and pay it to HMRC.

This means you are probably due a tax refund - as you won't have had any adjustment for the 'tax free' personal allowance that everyone is entitled to.

Being self employed, you are required to fill in a self assessment return each year, and this will help towards getting a tax refund.

The self assessment return will also calculate the NI that is due.

Your DP should try and speak to others in the trade, to find out if there is a 'good' accountant who can deal with this return for him without charging too much.

Can't really speak about benefits, not really my thing (I am an accountant btw)

The contractor should provide some kind of statement detailing the amounts earned and the tax deducted.

ShesaidthenIsaid Mon 01-Feb-16 18:37:48

Thanks all. What is CIS and who does it go to?

He has told me that no-one can get a job as being 'employed' in the construction industry. He is entitled to no holiday pay/sick pay/nada!

When is the end of the tax year and how does he complete the self assessment? If he hasn't been issued with payslips, what does he need to produce instead?

ShesaidthenIsaid Mon 01-Feb-16 18:40:35

Topcat - crossed posts there - as he is out of work now - can he submit a self assessment now? Or does he have to wait until the end of the tax year?

ShesaidthenIsaid Mon 01-Feb-16 18:44:11

Hang on. We are Irish. Would he be entitled to job seekers allowance (not NI based?). Or do we hike a trip to Dublin?

DisappointedOne Mon 01-Feb-16 18:49:01

Self assessment deadline in the UK was yesterday. There's a fine for late submission.

If you're not UK residents then I can't imagine you'd be entitled to UK benefits.

DisappointedOne Mon 01-Feb-16 18:50:10

To clarify - yesterday's deadline was for the April 2014-April 2015 tax year. Deadline for 15-16 won't be till next January.

QforCucumber Mon 01-Feb-16 18:51:34

If he has registered as a sole trader he will receive notification after April to complete his self assessment. What is it he does? I work in construction and all of our men are employed, we don't operate using sole trader/contractors (scaffolding company) and dp was under cis until he found a job employed at a local council (electrician) they are difficult to come by but they are out there. Mostly agency work now in the industry is self employed though - thats how the agencies get away without paying employers national insurance.

ShesaidthenIsaid Mon 01-Feb-16 19:07:22

He's a labourer. Groundwork/manual digging/laying concrete/cango (breaking out concrete)/pipework (laying pipes) etc.

He has done bricklaying and paving for this company, but receives nothing bar a 'bit of praise'.

To qualify or whatever as a bricklayer etc., he needs to fork out 500 for the tickets/cards/whatevers.

He is very talented at bricklaying. But he is cheap labour for this.

Also talented at paving. Again, has no 'ticket'.

It's an absolute haims.

I don't understand the construction industry nor the self employed industry. DP would be the least likely to ask a question. He just 'does' things with his hands.

Anyway - you've been extremely helpful to me/us in trying to get to grips with what is going on. Thank you for your help.

topcat2014 Mon 01-Feb-16 19:14:15

Your DP really does need to get some confirmation from the contractor of the tax deducted. Google the Construction Industry Scheme on the gov.uk pages. It is reasonably easy to follow.

It has been a few years since I worked in that sector - and I know a lot more is online now. (sorry for the vagueness).

You can apply for an in year tax refund. Again, you need to look on .gov.uk/

www.gov.uk/what-is-the-construction-industry-scheme

BarbaraofSeville Tue 02-Feb-16 04:56:56

Hi OP

Apologies if anything seems like stating the obvious - you mention that you are Irish so I am trying to include as much info as possible in case you are not familiar with the UK tax system and I don't know how it differers from the Republic of Ireland (sorry I assume you are from the Republic apologies if this is wrong). smile. How long have you lived in the UK and how long has your DP being doing this sort of work?

Unfortunately, it's shit in the construction industry in the UK. There is plenty of work but no job security and a lot of middlemen taking a cut of the workers' wages.

My DP has various jobs but in the winter works as a plant driver in the building industry. He gets all his work via employment agencies so your DP needs to get himself registered with a few of them in your local area.

I think my DP got names of agencies via the job centre but googling brings up Agency Central so perhaps look there to find ones that operate in your area and trade?

Luckily he is in the middle of a contract that will last at least 5 months, maybe longer but he gets lots of texts from the agencies offering other work.

If your DP has a UTR that means that he is registered as self employed with the UK tax office, but that does not necessarily mean that he is legally considered to be self employed. That is for HMRC to decide and there is a big problem with False Self Employment.

He may be registered with the CIS scheme where they take 20 or 30% of wages for tax. This is because in the past there has been a big problem with tax avoidance in the construction industry .

If he has a UTR he needs to do tax returns and he also needs to look at what has been paid in his name via CIS because he may be due tax back as they don't take account of your tax allowance and the tax rate is 20% unless you earn more than about £42k pa.

Once you are correctly registered with the CIS scheme (there seems to be a couple of steps and if you don't complete step 2 that's when they take 30% not 20%), you can see online on the HMRC website when you do your tax return how much tax you have paid. The lack of pay slips is worrying - he should be getting some written advice about his pay, but that might only come after the end of the tax year on the 5th April. Thinking about it, my DP didn't get written advice when he was on CIS but they sent something at the end of the tax year and it was all there when he did his tax return, so maybe this is standard practice.

The other way that he might get paid if he does agency work is via the umbrella system which is also shit. Full details here. This is the response to the workers not really being self employed and the umbrella companies take a cut of their wages.

It may be possible to set yourself up as a limited company to avoid being on the umbrella system or try to get on PAYE with the main contractor or subcontractor but the limited company route is expensive and not worth it unless you earn more than about £25-30k I think.

I also suspect that there is a lot of back scratching between the employment agencies and the umbrella companies so you pretty much just have to accept the system or not work.

The government also keep cracking down on all these things because the workers are effectively unwilling participants in a great tax avoidance scam, but that's the way it is at the moment.

DP is just sticking with it and trying not to worry about all the above because the alternative is NMW shop or factory work, which pays less and he hates - he likes being a plant driver and earns reasonable money from this.

To get into this was surprisingly easy too - he did a free 2 day course for one machine and paid £200 to learn to drive another machine and now has always had work when he has needed it in the past 2/3 years. Was harder at the beginning as he had no experience, but once he had got experience it has been fine.

Good luck, HTH, and on the bricklaying front, I can only suggest that your DP talks to the bricklayer bosses on site to find out if there are any vacancies and whether it would be worth saving up to pay the £500 to get the right tickets once he is back in regular work?

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