CIS tax refund
CIS Tax refund for subcontractors
When you are working in the construction (building) industry, it’s important to know whether you’re working for yourself (self-employed) or for someone else (employed), as it will affect how you pay UK income tax and national insurance. However, whatever your trade, whatever your employment status, construction industry workers are entitled to claim additional work-related UK income tax allowances and reliefs, leading to a construction tax rebate.
CIS tax refund if you work for an employer and are paid under PAYE
For example, if you are employed there is a standard ‘tool’ allowance, an allowance for laundering work clothes, income tax relief for buying steel toe capped footwear and, if applicable, safety glasses. In addition, a construction tax refund can arise if you pay training costs, registration and/or certification fees etc. Finally, you may be able to claim UK tax back on travel (car, van or public transport) costs and a daily subsistence (lunch) allowance if your work entails you travelling between various work-sites.
CIS tax refund if are self-employed
If you work for yourself in the construction industry you will probably come within the special rules called CIS. CIS covers most construction work in the UK and you will be designated for UK income tax purposes as a ‘subcontractor’ if you provide services to someone else in the construction or building industry.
Paying tax if you are a CIS subcontractor
For most subcontractors, money is usually taken from your payments each week or month by your contractor and paid to HMRC. Then, after the end of the tax year (5th April), you need to complete a Self Assessment tax return. The information tells HMRC if you owe more UK income tax (unlikely!) or if HMRC owes you a construction tax refund (very likely!).
If you are self-employed, any deductions which have been taken from your payments during the year can be used to reduce your UK income tax and National Insurance liabilities. There are, though, a lot of additional deductions/expenses that you can claim against your ‘gross’ earnings, all of which reduce your UK income liability and increase the amount of your construction tax rebate.
What we do is check to see if you are due any UK tax back. Then, once we have succeeded in finalising a construction tax refund for you, you will continue to save UK income tax for the current and future income tax years.
So, don’t delay – help us to help you by filling in the Construction Workers tax form and leave it to us to do what we specialise in i.e. checking to see if you are entitled to a specific construction tax refund and/or to any UK tax back i.e. a UK income tax rebate of any UK tax overpaid in the past 4 years.