What forms do I need.

[MK_Dizzle]

What forms do I need. UK Tax HELP

Hi

I'm currently doing a tax return for my friend who is a subcontractor working under the CIS scheme. I understand that he's been taxed at 20% and that no allowance has been taken. He is expecting a rebate which I have calculated at around 2,500 but I don't know what forms to fill out. He hasn't received any and would like it back asap so any help would be great.

I've got his income, expenses and tax paid. I've downloaded a self employed (short) tax return and a basic tax return 2013 form. Also if he hasn't received anything like AIA's or interest from banks etc do I leave the boxes blank or enter 0 or a -. Is everything rounded as well? It seems like the pence has been greyed and 0's entered

Any help would be much appreciated.

 

[Becky]

If a subcontractor has suffered CIS deductions, then they can be claimed against their income tax and NI due for the year. There are no separate forms to complete, relief is obtained through self-assessment - there is a specific box to enter deductions suffered on the long SA103 form (self employment).

http://www.hmrc.gov.uk/forms/sa103f.pdf - Box 80

Hope this helps!

 

[Becky]

As an aside, it would be worth him seeking gross payment status if he meets the business, turnover and compliance tests:

HM Revenue & Customs: Getting paid and paying tax - advice for subcontractors

 

[MK_Dizzle]

He has only made 20,000 this year. And has payed 4000 tax and no account of his allowance has been brought in. Does this mean that 20,000 less his few expenses which only consist of fuel, work wear and a proportion of phone and less his personal allowance is his taxable income. Then any overpaid CIS tax should be rebated to him? There will be alot of the expenses and boxes on that form which I have no figures for, do I leave them blank or mark them? I'm looking at the full 2013 return and even the self employed form and thinking this just seems abit too many forms seeing as his income is 20000 and expenses 4500 with CIS of 4000 paid I've calculated a rebate when minusing his personal allowance of 2500 but these forms just confuse me could do with one big explanation if you could help

Much appreciated

 

[Becky]

The CIS deductions taken by contractors do not take the personal allowance into account - it is just a flat rate applied to the labour work done. They are required by law to do this, so unfortunately unless your friend is able to up his earnings and obtain gross payment status he will suffer deductions and be required to claim it back Seems a bit unfair really, but the reason that the rules were brought in was that a lot of construction work was done cash in hand and taxable income was not reported.

When you are filling out the form, if there are any non-applicable boxes then you can leave them blank unless you are specifically instructed to fill them in. There is some good guidance on HMRC's website which might be useful to you:

SA150 - How to fill in your tax return (2013)
SA103F Notes - Self-employment (Full) Notes (2013)