To ask if anyone can help me figure out my OH's tax situation?!

[taxnamechange]

I am clueless when it comes to complexities with tax and my OH is evasive.

We have been together for nearly 5 years, lived together for 2.

He is 'self employed' / sole trader but always works for the same large construction company.
He has tax deducted from his pay each 'payslip' from this company as well as NI contributions. I don't understand this because he is still required to submit a tax return each year, so is he on some sort of 'emergency tax code' or something 🤔 and how can this be if he is self employed?

He used to have an accountant who filed his tax returns. He hasn't been back to this accountant for years. Apparently he has been receiving fines from HMRC because he has not done his tax returns.

He refuses to go back to his old accountant because he doesn't want to pay them to sort the problem out.

He has NO receipts for his work costs at all.

He refuses to let me try and help in any way and shits down when I bring it up because he is so anxious about it. His head is thoroughly in the sand and I don't know what to do.

Does anybody know if there's a way to sort this if he has no receipts for several years?

Yes he is a fool. I don't know what to do.

Yep, CIS.

His tax will be adjusted when he submits returns, and he may well be due quite a big refund.

There's not much you can do. If HMRC have his current address they will be sending letters and penalties. They could choose to turn up on the doorstep but it's unlikely if he's a small fish. He's losing 20-30% of his wage to HMRC each month and will have nothing to show for it, with non filing penalties racking up and no contribution to his state pension.

I believe HMRC have his old address and not his current (he lives with me now).

Unfortunately we have a baby and he is the sole earner since early last year.

The CIS deduction made by the employer/main company and paid over to HMRC is for both NI and tax.

Would he be willing to go to a new accountant, with all his paperwork, and sort this out?

Does he buy materials or just supply labour?

If he's labour only then receipts are less of an issue as the only things he can claim for is travel to different sites, and safety equipment if he buys his own safety boots etc. And if he orders these online, he might have email receipts.

But yes, as others have said, if he's on CIS, he could be due a refund, not owe more tax as they take 20-30% off everything without accounting for the personal allowance.

It's really not hard to do an online tax return so you might find it easier to do it together if he's really not going to do it, but if there's fines to pay, that could obviously make it more stressful/complicated.

He needs to confront this and you need serious professional advice before the fines keep increasing (and they will be charging interest too).

He must call HMRC as a matter of urgency and you need to take steps to protect yourself financially.

If it’s under CIS and he’s kept to receipts for his expenses (meaning he can’t claim them) he’ll just need to file the returns showing his income and the CIS tax he’s already paid. Not difficult at all.

If he hasn’t got all of his pay slips he can try contacting HMRC for the details as the contractors have to send them to HMRC direct anyway.

The way CIS tax works means he won’t have gotten the benefit of his tax free personal allowance - he’ll have been taxed on everything at a flat rate. This means he will more than likely be due a tax refund for each year.

He’ll have been charged late filing penalties for each return he hasn’t submitted on time. If he’s not done 4 those penalties will be in the hundreds by now and growing.

Hopefully the tax he’s overpaid will cancel them out. Maybe he’ll still have a bit left over to pay for the penalties. Maybe he’ll even be left with a refund after they’ve been paid. Either way, it’s pretty easy to sort.

He needs 2 figures for each year really. Income and tax paid. File the returns online. Job done.

If he ignores it, he’s going to end up in a real mess.

He might be due a refund but that might not mean much depending how high the fines have risen.

A couple of things you will need to start - his UTR number - this doesn't change even if he is self employed on and off, once you have one, it's with you for life. You can probably arrange to be sent a reminder on the HMRC website.

He also needs an online account - that can take a while to set up or restart as they need to send things in the post - obviously check the address before asking for things to be sent.

When DP registered with CIS there was some process at the beginning where they said 'we take 30% tax until you do X'. I can't remember what X is, registering with CIS I think, but doing that means you then pay 20% tax on all earnings. You then just do a fairly simple tax return at the end of each year, and usually get some money back.

Once you have the log in details, you/he can do the tax returns, but it might be worth talking to HMRC beforehand, to see how the many late returns will affect it, or if he can just log in and catch up with the returns.

He's an idiot!

Don't entangle your finances with his in any way, or you'll get burned.

If he is having tax as well as NI deducted, he will be employed and will not have to file a tax return. There is no chance he would be self-employed is NI is deducted.

If, however, it is just tax he is having deducted, he will be a CIS, self employed subcontractor and will have to file a self assessment.

If you can see his payslip, if the tax code is e.g 1250L/ 850T, he is employed. If the tax code is CT, CTI or CT0 he will be being paid on a self employed basis.

Finally my job has come in useful..!

Thank you all, I knew Mumsnetters would know their stuff !!

I have done a few online tax returns for myself as was self employed for a few years so would definitely be able to get him registered for online and would sit and do it with him....

Just need to somehow get him to DO IT and stop being a dick!!!!

He is a sub contractor and they deduct twenty percent at source. He has to do a return where he advices his expenses and in most cases gets a refund. Accountants charge about £300 I do them for about ten contractors and charge £80 takes half hour a return

This company are huge and established so they definitely won't be doing anything illegal.

Hahahahahaha!

It sounds like under the CIS scheme tax but not NI is taken off his pay.

Do you get child benefit? Should you be? If he earns over the threshold then you should be paying it back each year on his tax return for example so it is important he sorts out these things and it does involve you given the possible child benefit issue.

As someone said above the CIS monthly statement will show what is deducted

Not that many people know about the construction industry tax scheme hence my links above about it. It is not the same as in most other sectors as regards tax.

Been a while since I've dealt with cis from this angle but without returns hmrc can raise assessments against him and chase him for monies they consider due REGARDLESS of the deductions taken at source. Basically, see an accountant NOW.

@bridgetreilly

I'm an accountant - he needs to speak to one NOW !!!

Next step from HMRC will be bailiffs to recover money !

Sounds like he is CIS. 20% will be deducted from labour cost to cover some tax. If however he is a higher rate tax payer, then he will have an additional liability. There will also be NI due.

This situation will only get worse, not better.