How to Calculate CIS Tax Return?

How to Calculate CIS Tax Return?

Under the construction industry system (CIS), contractors deduct money from subcontractor payments and remit it to HMRC. The deductions are regarded as advance payments toward the subcontractor’s tax and social security contributions. Contractors must register with the system, although subcontractors are not obligated to do so. Even if they don’t register, their payments are deducted at a greater rate. Contact Taxback if you want to know “How to Calculate CIS Tax Return.” If you’ve paid too much tax or national insurance, we can assist you in seeking a refund of your construction industry scheme (CIS) deductions.

What exactly is the CIS construction industry scheme?

The CIS is a tax deduction scheme in which tax is deducted at the point of payment from payments related to construction projects. Employee payments are exempt from CIS since they are subject to the Pay As You Earn (PAYE) tax deduction system at source. If you work in the construction industry, you must complete a Self-Assessment tax return which includes a reconciliation of your refund.

How to calculate CIS tax return? When should you register for CIS scheme?

Do you work in the construction sector in the United Kingdom? Did you know that if you work for a contractor and are self-employed, the owner of a limited liability company (LTD), or a partner in a partnership, you must register for the Construction Industry Scheme (CIS)? 

Determining tax deductions 

If you’re eager to determine how much tax you can deduct for the preceding fiscal year. Taxback’s experts can assist you in completing and submitting your tax return. Based in Gloucester Road, West London, we’re one of the country’s oldest and most comprehensive tax refund companies. In this manner, you can be sure that the tax return declaration is filled out accurately, submitted on time, and you’re not paying more tax than necessary.

When is the deadline for the CIS refund?

When you deduct tax under CIS and have a lower income, you’ll likely get a refund due to trade expenses and the availability of personal allowances. This is crucial because HMRC may need proof that you spent an expense and that the expense was entirely and only for your business. You should not make them up or include private expenses to reduce your taxable profits and obtain a greater refund—this is illegal and punishable by harsh fines.

What kinds of building work are covered by the CIS?

The CIS covers most construction work relating to permanent or temporary buildings or structural or civil engineering work such as roads and bridges. The CIS classifies construction work as site preparation, such as laying foundations and providing access, demolition and dismantling, building work, alterations, repairs, and decorating, installing systems for heating, lighting, power, water, and ventilation, cleaning the inside of buildings after construction work, and so on. Take the pain out of your CIS tax returns with our simple tax service. At Taxback, we’ll handle your CIS tax return online in a brief period. We’re a team of CIS tax return accountants specialising in CIS self-assessment tax returns.

How long does it take to get CIS tax back?

It usually takes between one and eight weeks to receive your refund after filing your tax return. HMRC security checks and processes mainly determine the timeframe. E.g. if it’s a hectic time of year for them, this can slow things down.

What if you’re a subcontractor?

The good news is that subcontractors are eligible for a CIS claim tax back from HMRC at the end of each financial year. However, the practicalities of claiming this refund can be complicated.

When should CIS return be submitted?

CIS returns must be submitted by the 19th of the month, detailing the preceding tax month’s activity. Each month, a tax month begins on the 6th and concludes on the 5th of the following month. So, if you file a CIS return for the tax month of April 6th through May 5th, the deadline is May 19th. You may be wondering who’s responsible for paying CIS to HMRC. As a contactor, any deductions made must be paid to HMRC. When you register as a contractor, HMRC will set up a Construction Industry Arrangement (CIS) payment scheme for you. HMRC will convert your current PAYE plan to a PAYE/CIS system if you already have employees.

Record keeping under the CIS scheme

Did you know that failing to produce your CIS records when questioned by HMRC might result in a £3,000 fine? To be safe, maintain these details for at least three years following the end of the tax year to which they pertain. HMRC may request access to your CIS records at any time. This is why you must keep your records safe. You must retain the following records under the Construction Industry Scheme (CIS):

  • The total of all payments invoiced by subcontractors, excluding VAT
  • Any subcontractor payment deductions you’ve made
  • If you make deductions, you must also preserve records of the cost of materials invoiced to you by the subcontractor, except for VAT.


If your business is in the construction industry or undertakes construction-related work, you may be required to register with HMRC as a CIS contractor or subcontractor. The CIS scheme specifies how contractors must handle payments to subcontractors for construction activities. Usually, it’s up to the contractor to determine whether a subcontractor operates within the CIS, but you should check with HMRC to be sure. Before issuing any payments, the contractor must confirm with HMRC that the subcontractor is registered under the CIS. For seamlessly handling your CIS tax refund in the UK, get in touch with us. We’re Taxbback—a leading CIS tax return accountant.

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