Are we better off on the cards or CIS?

Are we better off on the Cards or CIS?

I am writing from my own experience of both sides of the coin. This is my own view and others will differ, but hopefully this will go some way in dispelling the myths on sites up and down the country that you are better off being CIS.

I spent five years on the cards with Crown House Technologies, was made redundant in 2009 and subsequently spent the next five years bouncing from job to job either through agencies, subbing direct or on the odd occasion, sat on my arse at home looking for work. I have just completed my first month back on the cards.

There is the common mis-conception that you are better off being CIS rather than cards in. Yes it is true that CIS workers pay less NI and tax each week but
over the course of a full 12 month calender year it becomes obvious that the CIS worker is in fact earning less than a cards in worker.

The first plus point for being on the cards is costs.
A few things that 'cards in' workers get that CIS workers have to pay for themselves that cards in workers receive:
Keeping trade cards up to date,  new training courses,  purchase of work clothing,  boots,  travel time,  travel allowance,  holiday pay, bank holidays, employment rights,  redundancy,  trade union recognition.

When all of those are taken into consideration that is one big nod in the direction of cards in.

Earnings Scenario

There are two JIB Approved Electricians working alongside each other on a generic site in Central London. One is cards in for a JIB company and the other is an Agency worker paid through CIS.

They both start work on Jan 1st and finish on 31st Dec.

The site is 16 miles from both of the Electricians homes and the companies office.

The company is paying ten hours a day. So both Electricians are to receive 50 hours a week money.

The earnings for both Electricians for a normal working week

The CIS - Agency Electrician

Working 10 hours a day, being paid £15 an hour.

15 hours x 10 = £150 a day, 

x 5 days = £750 a week 

subtract - £25 ltd company payment fee and 20% CIS tax £145  

= £580 take home for the week

The Cards In Electrician

Working 10 hours a day, being paid £16.64 for the first 37.5 hours and £24.96 thereafter.

7.5 hours x £16.64 = £124.8, 

2.5 hours x £24.96 = £62.40

£124.80 + £62.40 = £187.20 a days

x 5 days = £936

subtract - NI Contributions £81 and Income Tax £175 = £680 

then add the Travel time and Travel allowance of £43.90 a week 

= £723.90 take home a week

The earnings for both Electricians for the full calender year

The site shuts down for 2 weeks at Christmas.

There are 5 other bank holidays.

Both Electricians have a one week holiday in the summer.

Adds up to 20 work days or 4 weeks

The CIS - Agency Electrician

With a weekly NET income of £750 per week

52 weeks in a year - Take off the above 4 weeks = 48 weeks

48 x £750 = £36,000 

+ £36,000 - Gross Income

- £1,200 - Ltd Company fees for 48 weeks at £25 a week

- £6,960 - 20% CIS tax over 48 weeks

- £137.80 - Compulsory NI Contributions of £2.65 per week

 

£27,702.20 - ACTUAL CIS TAKE HOME 

The Cards In Electrician

With a weekly NET income of £936 per week

52 weeks paid as Cards in workers receive holiday pay and paid bank holidays.

52 x £936 = £48,672

+ £48,672 - Gross Income

- £9,096 - Income Tax

- £4,205 - National Insurance Contributions

+£2,107 - Travel Time and  Travel Allowance paid at 48 weeks

 

£37,478 - ACTUAL CARDS IN TAKE HOME

The above calculations do not include any weekend work. 

Generally, as an Agency worker, you are on a bloody good deal to get the weekend paid at time and a half.

Both Electricians work Sat and Sun and are both paid 10 hours a day.

 

The CIS - Agency Electrician

20 hours paid at £21.50 an hour = £430

+ £430  

- £86 -  20% CIS 

= £344 additional earnings

The Cards In Electrician

6 hours paid at time and a half & 14 hours paid at double time

£24.96 x 6 = £149.76

£33.28 x 14 = £465.92 

£149.76 + £465.92 = £615.68

+ £615.68 

-  £56 NI Contribution 

-  £85 - Income Tax

+ £17.56 - Travel Time&Allowance 

= £492.56 additional earnings

So two everyday Electricians, both JIB Approved card holders with two very different circumstances.All of the above calculations do not take into account the first point made about costs of training, travel etc.

Add all of that together and in my view, we would all be alot better off on the cards.

The last and final point that seems to get left behind. Once the entire workforce is on the cards they are in a position of greater strength in wage negotiations, bonus payments etc.

So if the whole industry was cards in, the rates would not be as stated above or in whichever national agreement rule book you have in your hand. They would be well above and beyond

Daniel Dobson
Electrician from the South East