DS 17 - Construction scheme

[squarepegroudhole]

DS is just about to leave college. He’s been working a couple of days a week for a local house builder and it seems the builder is keen to take him on full time. We have been expecting an employment contract but DS has come home today with a form about registering as self employed and registering for the Construction Industry Scheme. This has thrown us a little as both DH and I are employees.

We are a bit worried. It looks like the Construction Scheme is government backed which is good. Is it quite normal for a business to work this way? It seems the business will retain 20% of DS wages each week and submit that it HMRC so paying some of his tax (hopefully all).

DS is desperate to work and wants to do this. We are concerned about National Insurance, Pension, Sick Leave (I don’t get sick leave so I am not hugely concerned about that), Holiday pay - assume none and what if work is called off in the winter etc.

Can anyone offer any help here. Anything concerning with what I have written? Anything I’ve not thought of?

CIS is very a common way to work in the building trade. My ex husband and now my ds both work this way. You have to submit a tax return every year, are responsible for paying your own NI and pension contributions. He can save all his receipts for anything related to his work so that When he submits a tax return he can claim the tax back. Stuff like tools, work clothing, boots, phone bill, utilities percentage for his home office, insurance etc. then he’ll probably end up with a tax refund because his 20% was more than what he owed.

Thank you for posting. This is helpful. I will research more and in particular National Insurance. Considering letting a pension wait for a year until he’s 18 and he’s done his first tax return and see where he is financially and if it’s still what he wants to do.

I got an accountant to do my Tax returns for me for the first couple of years, that way he was able to list things I could claim for which I wouldn't have even considered, also I had copies of each year so when I started doing my own online returns I knew what to put.
It's like everything else easy when you know how but daunting when you first start.

Yes, very daunting. I think the lack of holiday pay and possible winter shut downs is a worry but if you get money back at the end of the year it would give you some of that back I guess.

I have seen builders do this like renting equipment, flexibility helps, no benefits ensure tax, insurance, and steady work are clearly handled.