Why cant I go on the CIS

It is a common misconception that anyone working in the construction industry can decide for himself whether he can go ‘on the tools’ (i.e. be paid as self-employed under the Construction Industry Scheme) or ‘on the books’ (be paid as employed under PAYE).  No more can the construction company decide for itself which it is to be.
There are a number of tests to decide which it is to be, but the personal preferences of the individual worker and the company do not come into it.  Rather, the correct categorisation is decided by the nature of the relationship between the two.  Whole books have been written on this subject, but you can get a long way by asking yourself:
– Are you expected to complete a particular job (such as to build a wall or make a staircase)?  If so you are probably self-employed and can go on the CIS.
– Are you expected to know how to do the job asked of you, or does someone tell you how to do it?  If you require no supervision and get none, you are likely also to be self-employed.
– Are you there to do what the boss asks you to do between the time you start and the time you finish?  If so you are probably employed and should go on PAYE.
However these are only indicators.  Specialist advice will almost always be needed if you have a dispute about it.
David Kirk FCA CTA is a freelance tax consultant specialising in the intermediary sector.  He can be obtained on 0845 519 5041 or at dk@david-kirk.co.uk.

On February 20, 2014, posted in: Articles by