What records should you keep as self employed in construction industry

I'm trying to help someone who was self employed in construction industry.

He has not received full payment for work carried out.

Some payments in form of cash, some in form of a cheque.

No paperwork from dodgy contractor.

So my question is what sort of paperwork he should be given or produce himself.

SA is already late and we will have to use estimate figures as there is no paper trail at all.

Has he got an accountant? It might be a good move

No accountant at all.

That was a one off short job.

He thinks that bookkeeping is something happening in library.

HMRC told me that he should be given 'Payment and deduction statement' by end of each month. He had none of those. He tried getting them hard, so hard in fact that there probably is police record.

HMRC was quite helpful and told me that late filing penalty is likely to be cancelled given circumstances and we should just use estimate figures.

Do you know whether your friend is registered for the CIS scheme?

Subcontractors don't have to register, but if they aren't, then contractors are obliged to deduct 30% tax from payments to subcontractors.

If your friend had deductions taken from his payments, at 30%, and paid over to HMRC by the contractor, then he may be due a refund.

Even if there is no refund due, he must do a self assessment return as soon as possible. I'm sorry for your friend, it sounds like it has been a nightmare, and beyond his control. In the absence of paperwork, he can only submit estimates. Best to address this and put it behind him.

I'd be happy to offer my services to get best estimates together from the information you have, and submit the SA. Then we can appeal the late filing penalty, which I'm sure would be successful, given the circumstances. My fee would e £75 if you wanted to go ahead.

Best of luck

A little update.

The gentleman did exactly as advised by HMRC.

Filled in SA with estimate figures and wrote an appeal.

They contacted him because he sent it in one envelope and there was some mix-up.

Ended with substantial refund and appeal granted.

Can't fault HMRC on a thing.

Has it always been 30%

The CIS rate is 20% if registered and contractors take 30% if subbies are not registered.