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What are CIS refunds and am I eligible to receive one?

What are CIS refunds and am I eligible to receive one?

The world of contracting and subcontracting can be complicated enough without the complex matters of tax introduced. If you work in the construction sector, you have likely heard of something called the Construction Industry Scheme, commonly abbreviated as CIS. We'll be answering some of the commonly asked questions about CIS, including what it is and the eligibility criteria to receive a CIS refund.

What is the CIS?

The CIS is a scheme through which contractors deduct money from the payments made to a subcontractor; these deductions are then passed on to HMRC and are counted as advanced payments towards the subcontractor's annual tax and/or National Insurance.

Is enrolment in the CIS compulsory?

This depends on whether you are a contractor or a subcontractor. Contractors are legally obliged to join the scheme; subcontractors are not required to, but they will face higher deductions without joining the scheme.

Am I eligible for a CIS refund?

If you are a limited company subcontractor, you may be entitled to receive a refund. A refund claim can be made if you believe you have paid too much National Insurance or tax for any given year.

How can I claim a CIS refund?

There are many ways that you can claim a CIS refund. The quickest and simplest way to claim a CIS refund is online, but postal claims are also an option if you would prefer to fill out the forms by hand.

How long does a CIS refund take?

The time for a CIS refund to be processed varies from case to case. On average, you can expect your CIS refund claim to be processed and awarded in between 1-8 weeks. This depends on the time of year that you process your claim; for example, the end of the financial year may take longer to process.

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