CIS Tax Returns
CIS Tax Rebate
Tax returns for CIS
Construction Industry scheme (CIS) effect most of sub-contractor in the building trade. A mistake when filing CIS return can mean you will be paying more tax than your expected tax amount.
S K Punia Accountants are expert in the CIS return and have helped construction industry workers to get tax refund from £3000 to £9000 on average.
Who pay CIS Tax? or Do I have to pay tax If I am CIS ?
CIS tax is paid by sub-contractors/worker working in the construction industry. All construction companies are required to deduct cis tax at source before making the payment to the worker.
Construction company require to check the UTR number for CIS and if UTR is confirmed they are require to deduct 20% and if not confirmed to deduct 30% tax.
It does not mean you will be counted as employed, you still be counted as self employed under CIS.
You will still require to file self-assessment each year. It is important to file tax returns every year, if you do not file the cis tax return on time you will get
Penalty for not filing the tax return
You will not be utilizing your tax free personal allowance
You will not be getting any relief for work related expenses
Does Limited company need to pay CIS as subcontractor ?
Construction company contracting any sub-construction company is also require to deduct tax before making any payment and is only exempt if the sub contracted company have obtained exemption certificate.
However, sub-construction company can utilize these tax deduction toward any corporation tax liability.
Will I get any cis tax deduction statement?
CIS deduction and payment certificate
Your contractors should provide you cis tax deduction statement showing your total gross and tax deducted.
HMRC have strict guidelines for contractors to provide cis tax deduction statement to workers. If you not getting the cis tax return statement then first instance contact your contractor, they should provide you the statement.
It can be just be a simple admin error, they may have forgotten to send you one.
Do not leave it for the last minute, it can delay getting your tax refund if your contractor have not paid your tax deduction or made the mistake deducting your cis tax.
If after requesting, you are not still getting the statement. Get in touch with S K Punia Accountants we can help.
Do I need to do a tax return/self-assessment if I am self employed?
Any self employed person working in any kind of businesses are require to file self-assessment even your earning are below taxable income threshold.
In most self employed businesses you get paid gross amount but in cis when you working in construction you get tax deducted before you get paid, Tax is deducted on gross amount by contractor and they are not require to consider exempt amount such as your personal allowance.
Filing your tax return in 90% cases will get you tax refund. Many people try to file cis tax return themselves and majority cases they end up paying lot of extra tax than they should have if the return was filed by certified accountant.
S K Punia Accountants are certified accountants and will take into consideration of every penny which will increase the tax refund amount.
CIS Tax return accountants?
There many types of accounting firms and freelance accountant out there. It is our suggestion to check with them, if they have filed any CIS return before or search for an cis tax accountant or check their review.
S K Punia Accountant fee structure is simple, we will not charge you on hourly rate, our price starts from £180.00, we will discuss the process with you and will agree the fee in before start working on your cis tax rebate.
What expenses can I claim under CIS return?
This is an area where a lot of self employed people on Self Assessment miss out, and end up paying too much tax. Following are few of examples of allowable expenses in construction include:
Work travel costs
Any work clothes
Any subscription such as CSCS
Any tools cost
any materials you bought
any rent of premises cost
stationery and accountancy fees
These are few examples of expenses which can be claimed against your income which will reduce your tax liability.
What are the rules for passing CIS work on?
If you are passing your CIS work to someone else makes you a contractor in HMRC's eyes.
It means you have to follow CIS contractor rules. You have to register yourself as contractor to avoid any penalty from the HMRC. It is important you need register before you take on your first subcontractor.
You have to deduct cis deductions from the gross pay of subcontractors and report it to HMRC and pay it.
You have file this information on monthly basis. You will also be responsible for producing the statement of deductions and passing onto subcontractors.
As a contractor can I claim the money paid to subcontractor?
You will be able to claim any money paid to subcontractor if you have registered yourself as contractor with HMRC.
Can HMRC enquiry into my CIS return and what will be the outcome ?
HMRC can enquiry anytime they like into your cis return. You mean to keep record of everything such as your statements as a sub-contractor. If you are a contractor then HMRC expect to see detail breakdown of payments and workers UTR number, address etc.
What is a UTR number and do I need one?
A UTR (Unique Taxpayer Reference) number is unique to either you or your company. Your UTR number identifies you personally with HMRC for things related to your tax obligations. It is made of 10 number. You will need this when you:
Register for self assessment
Set up a limited company
Register for the Construction Industry Scheme
We can help you to obtain UTR number on fee less than £35.00 for self-employed.
Get in touch
What work covered by CIS ?
CIS covers most construction work to:
a permanent or temporary building or structure
civil engineering work like roads and bridges
For the purpose of CIS, example of construction work includes:
preparing the site, eg laying foundations and providing access works
demolition and dismantling
alterations, repairs and decorating
installing systems for heating, lighting, power, water and ventilation
cleaning the inside of buildings after construction work
What work do not fall under CIS construction work?
architecture and surveying
scaffolding hire (with no labour)
making materials used in construction including plant and machinery
Work on construction sites that’s clearly not construction, e.g running a food services.
Does the house owner need to deduct CIS ?
Payments made by private householders are not under CIS.
For example, if you complete some work for a private house owner, the money paid to you by the house owner is not subject to CIS tax deduction.
However, if you ask a self-employed friend to help out, then any payments you make to the friend are subject to CIS. Notice that if the house owner pays both workers directly, then CIS would not apply.
Bob is asked to undertake some repair work on Jerry’s private home. He asks Sam to help him with the electrical work. Sam is working on a self-employed basis for this contract.
Jerry pays Bob without deduction of tax as Jerry is a private homeowner. Bob then pays Sam.
Bob should register under CIS as a contractor before making the payment to Sam. Bob should ask Sam for her UTR and check her CIS status with HMRC.
He should then pay Sam net of 20% tax or net of 30% tax depending on her status with HMRC (exceptionally, if Sam is entitled to register with HMRC for gross payment, then HMRC would tell Bob that he can pay Sam without deduction of tax; gross payment will only apply to larger businesses).
If HMRC advises Bob that Sam is registered under CIS (but not for gross payment), then Bob will keep back 20% tax and pay this CIS tax across to HMRC on Sam’s behalf.
If Bob failed to register as a contractor under the CIS scheme he could face very big penalties.
These include a £3,000 fine for not keeping CIS records, and a £100 per month penalty per missed return (and returns are due monthly).
Failing to register for a number of years could lead to penalties in the tens of thousands of pounds.
This can happen even when all the workers are registered as self-employed and have paid the tax due on their income.