DH new job? Is this all above board

[Stripedbowtie]

DH starting a new job. He’s a builder and is working for a small business owner who finds him the work. There’s lots of work available this way through this business. I’m concerned though as he’s been told he’ll be self employed and have to pay his own tax and NI contributions. If the business owner is finding him the work can he still be self employed? What legalities do we need to make sure of? For example there’s no contract of employment as he’s self employed but is this all legit? He’s being paid a set rate of money per working day by the business owner so can the business still make him self employed this way? How can I make sure DH is doing everything the right way in terms of legalities and paying his tax correctly?

Sounds like he is working as a sub contractor which is very normal
For construction industry. Check with your accountant - I think there is something called CIS scheme. Look up sub contracting on HMRC website and they will
Give you advice.

Sounds totally legit to me

www.litrg.org.uk/tax-guides/self-employment/what-construction-industry-scheme-cis

Completely normal, it’s on him to set up to pay tax, keep records and pay his tax correctly. He’s effectively a contractor.

phew! Ok that’s a relief!

Thankyou I will look now

Taxed under the CIS scheme at 20%, but if he's not registered himself with HMRC under the scheme he will pay 30% at first. He will be given a CIS statement every month after the 5th, save the statements for his tax return.

All the CIS subcontractors I've had dealings with, get a substantial tax refund after the tax return is completed.

He will need to save receipts for expenses occurred, tools, fuel, work wear etc, you can list them on the tax return as total expenses.

Sounds fine. I was self-employed and registered for tax as such, but most of my work was with the same organisation - this was arts, not building!

I thought under the CIS scheme the contractor withheld 20% and paid tax on your behalf, it does not seem that the contractor wants to do this.

Is it similar to other industries where you can not be classed as self employed if you are only working for one company on a regular basis? That would constitute employment.

You can be self-employed even if you only work for one company, but you need to be careful that it isn't "disguised employment". As a self-employed person, you may only have one client when you start, but will hope to build that up over time. Also, for some roles, you may work for one client at a time then move on to another job. So, for example, a freelance software developer will work for one client until their project is completed and will then move on to another client.

The description given by OP fits with her husband being a self-employed subcontractor.

If he is working for him all the time, then he should really be an employee, but this is rife in the building trade.

If he is self employed then he should be setting his own rate of pay and hours and providing his own tools, but that often doesn't happen (which is why it should be employment!). It should still be over NMW though, which although it doesn't apply to self employed people, he would be daft to work for any less than that!

Remember that he won't get any holiday pay or sick pay if he is self employed.

He needs to register as self employed, and also as a sub contractor, and then the contractor should take 20% off every payment, and give him a statement once a month that shows the tax that he has kept. The contractor then pays this to HMRC once a month. (as PP said, until he is verified, the contractor will have to take 30% tax off him).

When your DH does his tax return, he enters onto there the amount of tax that has been deducted, and it is set against what he owes. Subbies who do 100% CIS work, often get a tax refund at the end of the year.

If the contractor is not retaining the tax then he is not doing it correctly, but if that happens, then make sure that your DH puts away 20% of everything, in order to cover the tax due, which will be twice a year once he is in the HMRC payment on account system