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The Construction Industry Scheme (CIS) is where a construction contractor deducts, at source, a portion of the money due to their subcontractor. Whatever amount is deducted is then passed directly to HMRC which is then counted towards the tax and National Insurance of a subcontractor. This effectively pays the tax element in advance.
How much is deducted will depend on whether or not a subcontractor is registered under the CIS system. Unregistered subcontractors usually get a 30% deduction, while the registered ones get a deduction of 10% less or the standard rate of 20%. This is one of the reasons that, by the end of the financial year, the amount deducted at source often ends up being overpaid. But a bigger reason is the fact that the deductions did not factor in the personal allowance that every taxpayer in the UK is entitled to. Because of this over payment, many subcontractors in the construction industry are due a tax refund.
You can also claim extensively for any work related expenses such as; accountant fees, travel, telephone, tools, clothing, etc.
It is a complex process and to ensure you get the maximum tax rebate let Taxfile help you. CIS tax refunds and accountancy for sub-contractors is one thing that Taxfile is exceptionally skilled at. Over the years we have secured valuable tax refunds or ‘rebates’ for thousands of subbies working in the construction industry.
What Construction Workers Can Claim on Tax:
• Materials, Tools and Equipment
• Protective clothing/uniform
• Business travel
• Business trip expenses
• Internet phone and stationary
• Membership fees
• Motor expenses / mileage allowance
• Home office expenses when working from home
• Administration expenses including remuneration from a family member helping with administrative duties or bookkeeping
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