Are You Getting The Most You Can from Your CIS Refunds?

CIS Tax Help

So, how do you get the most from your CIS tax return? HM Revenue and Customs define the Construction Industry Scheme as “a set of special rules for handling payments made by contractors to subcontractors for construction work.” Subcontractors in the construction industry are often taxed at a very high rate — 20 to 30 percent — but can get much of that back through CIS refunds by claiming allowable work expenses. Here is a brief explanation of the process.

How to get the most from your CIS tax return application

In order to contract for work covered by CIS, you’ll need to register your business with HMRC. Under CIS, you can either register for gross payment, which means your employer pays you in full and you pay tax and National Insurance contributions later, or you can register for the deduction, in which the contractor deducts the 20 percent from your earnings and pays it to the HMRC. 

While you’ll still need to pay tax and National Insurance contributions later, the amount that has already been deducted will be taken off of your bill.

Qualifying for the gross payment option

Qualifying for the gross payment option requires the subcontractor to pass tests regarding their business, compliance with the HMRC and turnover. If any one of these tests is failed, then the subcontractor should register for the scheme anyway so as to avoid being taxed at the higher 30 percent rate.

What expenses can you claim CIS Tax Back on?

Even if you’re unable to qualify for the gross payment, you can claim any work-related expenses such as accountant fees, mileage, travel, telephone, tools, and clothing. These expenses can be used to offset the tax owed, so as to potentially increase the amount of the refund you receive.

Find out more about tax deductables for CIS workers in the UK

Getting the highest tax rebate you can is a complex process

Tax Back has over two decades experience as CIS Tax Accountants and ample experience in that process and will work to help you claim what is owed. For more information on CIS Tax contact our accountants today.

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