Subcontractors: Are you paying too much tax?
Keeping on top of your taxes is one of the most important aspects of running a business, but for the self-employed, taxes often fall to the bottom of the to-do list when there are so many other things that need to be done. For many people doing their tax returns, their biggest worry is making a mistake when calculating how much they need to pay and end up getting a fine later down the line. However, what people don’t consider is whether they’re paying too much tax, which in some respects is an easier mistake to make. We spoke to Jason Jervis of J. Jervis Accounting, a firm that specializes in dealing with tradesmen, to understand how people end up paying too much and what they can do about it. Are you paying too much? “Many contractors use the Contractor’s Industrial Scheme (CIS)”, explains Jason Jervis of J. Jervis Accounting. “This means that they deduct 20% off what they pay to subcontractors—like carpenters, tilers, and electricians—and give it to HMRC on their behalf.” “Although t...