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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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My uncle has just set up his ltd company in which he is the

Customer Question

My uncle has just set up his ltd company in which he is the sole director. He is in construction business and has to register for CIS as far as I know as he is doing construction business and has subcontractors working for his company.However, my question is regarding as if HIS LTD company will need to make any CIS deductions for my uncle as he is the director and doing construction work for his own company just like any other staff of the company.
Assistant: Thank you. Can you provide any more details to help us find you the right Expert?
Customer: CIS scheme How does it work at the weekends. Do I get answer on the same day?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

Let me take a look at this and I'll get back to you in a bit.

Expert:  TonyTax replied 1 year ago.

Only those working on a self-employed basis in the construction industry need to register with the HMRC Construction Industry Scheme. It would be highly unusual if your father worked for a company of which he is a director on a self-employed basis and HMRC would raise an eyebrow too. The company should register as a contractor within the CIS (see here) and also as an employer (see here).

Your uncle could pay himself a low salary to avoid paying NIC and draw a dividend as extra income as profits allow. Any other people who are on the payroll would not need to be registered under the CIS. Only the sub-contractors working on a self-employed basis would need to be paid on the CIS basis.

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.
from what you have stated I understand that it would not be advisable for my uncle to separately register as self employed and then register for CIS individually as he is already a director in the company.In respect of the company's regular staff recorded on payroll, there will not be CIS deductions from their pay unless those employees come out of payroll and register as self employed subcontractor.
Expert:  TonyTax replied 1 year ago.

You can be self-employed and employed as a director at the same time but I see no point in your uncle working for his company on a self-employed basis. There would be no point in having a limited company. He could use subbies if he was self-employed. The point of the CIS scheme is to catch those who are not employees/directors.

If the company had an employee dealing with admin etc for example, they would not need to be CIS registered.