If you are a sub-contractor within the construction industry, it is likely you are registered under the Construction Industry Scheme (CIS). As part of this scheme, HMRC deducts 20% of sub-contractor’s wages at source, which often mean workers end up paying more than they should. All CIS subcontractors are required to submit a tax return each year; however, many individuals find that their tax bill is already paid through the at source deductions. In some cases, there may be a tax payment due, although in many situations the contractors themselves are actually due a rebate.
If you are a self-employed worker within the construction industry, you are able to claim for expenses you incur as part of your trade, such as tools, vehicles, clothing and admin. These expenses are exempt from tax and can be taken away from your gross earnings to provide you with a taxable net profit figure. In addition, everyone in the UK has a personal tax-free allowance, which means tax only needs to be paid once you exceed this allowance. The CIS deductions which are taken from your pay at source do not take these factors into account, so many sub-contractors find that they are owed a refund.
To find out whether you are due a refund, simply send us your CIS statements, your expenses and your HMRC unique tax reference number. We will contact HMRC on your behalf, so you will quickly receive any refund due.
In addition to assisting subcontractors within their CIS refunds, we can also offer useful services to contractors themselves. Under the CIS scheme, all contractors much provide HMRC with the details of subcontractors to determine CIS payments. The contractor must then make monthly returns and declare that the payments do not relate to a contract of employment.
Our team of accountants have been assisting contractors within the construction industry for many years, so we are ideally positioned to take care of these requirements. We understand the rules and will ensure there are no tax underpayments or missed deadlines.