CIS Tax return service and CIS refunds
Our founder has over 20 years’ experience working in HMRC as well as having professional tax qualifications. All of our staff have either HMRC or an accountancy background.
Any contractors for whom you perform work for is required to deduct money from your payments and pass it to HMRC. If you’re a registered subcontractor 20% is taken and this is shown on your invoice. If you are not a registered subcontractor the contractor will be required to deduct 30% CIS tax. Average Refund for subcontractors is £2,784!
The good news is that often subcontractors are eligible for their CIS tax refund from HMRC at the end of each financial year. However, claiming this refund can be quite complicated and time consuming. That’s where we come in, we aim to get your money back to you within 2/3 weeks and you keep all money you are owed.
Did you know that if you are registered on the Construction Industry Scheme (CIS), you could be owed a CIS tax refund? As a self-employed contractor you can reclaim many of your business expenses against the deductions that your contractor made from your pay throughout the year.
CIS-registered sub-contractors in the construction industry are entitled to claim tax relief on eligible expenses on their CIS tax return.
Many contractors don’t realise just how much they are entitled to claim. That’s where you need the support of an expert.
We help thousands of construction sub-contractors maximise their CIS tax refund each year, with an average CIS tax refund of £2784.
CIS tax refunds, tax returns and the self-assessment system
Our CIS tax refund guide is here to let you know more about CIS tax refunds, tax returns and the self-assessment system.
All sub-contractors need to register under the scheme and complete a CIS tax return annually. Because tax has been deducted ‘at source’ (In other words, directly from their pay), you are then able to reclaim some of that money to compensate for certain ‘allowable’ expenses that were paid for throughout the tax year and use your personal tax free allowance.
You can claim for a wide range of expenses under CIS. The most common ones for our CIS clients are:
- Business travel − including public transport costs, as well as your motorbike, van or car
- Tools and equipment – PPE
- Accommodation and subsistence – especially if you stay away from home
- Use of your home – including mobile phone bills
- Professional fees – such as insurance, accountant’s fees and bank charges
It’s a good idea to hold on to your receipts for everything you must buy and keep a note of the places you travelled to and dates.
Frequently Asked Questions
The amount of money you might be able to claim back will depend on a few things:
- Your total income
- How much tax you paid
- What your expenses were
As a rough guide, the average refund we achieve for our CIS sub-contractor customers is around £2784
To complete your CIS tax return you’ll need information on all your income and outgoings.
These include:
- CIS earning records, like pay statements, showing income and tax paid
- PAYE P60 or P45 certificates
- Details of any property or investment income
Receipts or records showing any expenses you incurred
The CIS is unique to the construction industry and isn’t like any other self-employed tax situation.
It is possible that two people working on the same site may appear to have the same working arrangements, but one is in full PAYE employment and the other is working under the CIS. You need to look carefully at your payslip to see if your deductions are 20% (not 30% unless your contractor doesn’t have your UTR number) and if it says ‘CIS statement’ anywhere. If you can identify both things, then your tax is being paid within the Construction Industry Scheme.
- Transparent Pricing – We charge a flat fee of £199. We don’t take a percentage of the refund like some tax agents out there.
- Simplicity − our process is jargon free and time efficient.
- Success – our CIS clients get an average refund of £2784.
If your main contractor has not provided you with your CIS statements, you can request replacement copies to be sent over so that we can accurately assess your entitlement.
We are sometimes contacted by panicking subcontractors who cannot get hold of their CIS statements because the contractor has gone out of business or hasn’t provided them. If you haven’t been provided with statements, or a contractor has gone out of business, you can obtain replacement copies from HMRC.
If you miss the deadline, you will be charged an immediate £100 penalty. This penalty only rises over time and could rise into the £1000s. Don’t panic. We are experienced in helping clients get penalties scrapped, which is sometimes possible even on historical returns. We also know the right processes to go through to go back over previous years where you may have overpaid tax and get the figures corrected so you get the CIS refund you are entitled to.
we are highly experienced in all areas of the Construction industry and the intricacies of its unique tax rules. We work with many subcontractors on ensuring they get the full benefit of their CIS status, helping clients achieve the refunds to which they are entitled and getting their returns submitted in a timely manner.
We will assess your figures and paperwork and liaise with HMRC on your behalf. This alleviates any stress on you, particularly if you find the task of calculating your tax difficult or time-consuming.
This includes anything from managing a hectic full-time work schedule and intense time pressure to often having to make life-changing decisions daily. So leave it to us and we will take care of the tax returns and refunds.
Tips for bookkeeping to get the best possible refund
1. Keep records of every payment
Use your books to track every payment and make it clear when they were made or received so you can easily find them if you need to refer to them later.
2. Choose an accounting method
Your bookkeeping will underpin your accounting, so decide at the start which method you will use. Traditional accounting records income and expenses at the date of the invoice. Cash accounting records them on the date when you receive or pay the money. Cash accounting reduces the risk of having to pay tax on money you haven’t yet received but is only available if your turnover is £83,000 or less.
3. Be strict with deadlines
Never make late payments (especially to HMRC) and give your clients a payment deadline so you can chase them effectively. Take note of any late payers and consider not working with them if they keep missing payments. This is called credit control, and the aim is to keep your cash flow healthy.
4. Keep track of expenses
You can claim tax back from lots of business expenses to reduce your overheads. You’ll need receipts to substantiate your claims from HMRC, so keep them stored somewhere safe and organised in different business categories.
Be sure to keep business expenses separate from personal ones, so you can easily identify which ones can be claimed against profit to reduce tax.
5. File bank statements and invoices in order
Don’t waste your bookkeeper’s time and your money. Make sure all bank statements and invoices (purchase and sales) are present and correct, and in date order. Otherwise, you’ll be paying your bookkeeper for the time taken chasing down and sorting these documents, when it’s easy to do yourself. Worse, if documents go missing, then you could end up facing a fine for late filing.
For purchase invoices, keep separate files for paid and unpaid invoices, and file both alphabetically by supplier name. Always remember to move invoices over once you’ve paid them. For sales invoices, number them sequentially in order of when they should be paid, so that you can chase them effectively.
6. Suitable software
You may not need specialist bookkeeping software – it can be done with Microsoft Excel or its freeware equivalents. However, as your needs expands you may want a more specialist package. Speak to us and we can recommend the best software for your needs.
7. Monthly reports
Generating reports at least once a month is the surest way to stay on top of your business finances and ensure you don’t get caught out by nasty surprises. Your monthly reports should include a profit-and-loss statement and the balance sheet, as a minimum. Now you have a running commentary on how well your business is performing.
8. Know when to outsource
If your business starts small, it may make sense to handle the bookkeeping yourself. As you grow, keep track of how much time per week you spend on the books. Work out the monetary value of your own time and compare this with the cost of a bookkeeper. A professional bookkeeper may take only a couple of hours to handle a month’s accounts, so it won’t be long before this is better value.
