WHAT IS THE
CIS TAX REBATE?
When you work in construction, you’re encouraged to join the Construction Industry Scheme (also known as CIS, by those in the trade). It’s a scheme used by HMRC to make sure those working in construction pay the correct amount of tax. When you work for a contractor, most will only take subcontractors on if they’re registered for CIS.
When you’re not registered for the scheme, your contractor will automatically deduct 30% tax from your monthly wages. This is almost always more than you should owe. But when you’re part of the scheme, this automatic deduction is reduced to 20%.
However, even this 20% often works out to be more than you owe because it’s not based on a tax code. As a result, you usually end up being due a rebate. You claim this rebate through submitting a Self Assessment tax return.
How Much Will I Get Back?
The amount of Construction Industry Scheme (CIS) tax you might get back depends on a few things: (click the arrows below to read more)
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Earnings
If you earned money through construction work and your contractor deducted tax from your pay, you might get some of that tax back if you end up owing less tax overall.
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Expenses
If you have legitimate expenses related to your construction work, these can lower the amount of tax you owe. This might lead to getting some tax back.
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Other Income
Your overall tax situation depends on all the money you earn, not just from construction. If you have other sources of income, that can affect whether you get any tax back.
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Personal Allowance
In the UK, everyone gets a certain amount of money that they can earn without paying tax. This is called the “personal allowance.” If your total income is below this allowance, you might not owe much tax, and you could potentially get some tax back.
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Tax Credits
Depending on your circumstances, you might also be eligible for tax credits, which can lower the amount of tax you owe or even result in getting money back from the government.
It’s important to remember that taxes can be a bit complex, and the exact amount you might get back depends on your individual situation. To figure out how much CIS tax you might get back, it’s best to gather all your financial information and consult a tax professional or use an online tax calculator to get a more accurate estimate based on your specific details.
What Expenses Can I Claim Back?
Let’s break down some common expenses you might be able to claim for the Construction Industry Scheme (CIS) in simple terms: (click the arrows below to read more)
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Tools and Equipment
If you’ve had to buy tools or equipment for your construction work, you might be able to claim the cost of these things as an expense.
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Travel Costs
If you have to travel to different work sites, you can often claim the money you spend on travel, like bus tickets or petrol for your car.
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Work Clothes
If you need specific clothes or safety gear for your job, like hard hats or work boots, you can often claim the cost of these items.
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Training
If you’ve taken courses or training to improve your skills for your construction work, you might be able to claim the cost of those courses.
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Subsistence
This is money you spend on food and drink when you’re away from home for work. In some cases, you can claim these costs.
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Business Expenses
If you have other costs that are directly related to your construction work, like phone bills for work calls or costs for a home office if you use one for work, you might be able to claim these too.
Remember, to claim these expenses, they should be directly related to your construction work, and you should have proof of the expenses (like receipts) to show that you actually spent the money. It’s also a good idea to keep records of your expenses and consult a tax professional to make sure you’re claiming things correctly.
OUR PROCESS IS MADE SIMPLE.
FOR YOU.
The amount of Construction Industry Scheme (CIS) tax you might get back depends on a few things:
Step 1
Paperwork Received
To get you a Tax Refund, we need to know the details about your income and expenses
Step 2
Tax Return Preperation
We look over your paperwork and prepare our claim to HMRC.
Step 3
Your Confirmation
Before we submit anything we share our work and tell you how much you will get.
Step 4
Submission
Once we’ve received confirmation from you, we submit your TAX Return.
Step 5
Repayment Received
After a few weeks, we’ll receive your payment and conduct checks.
Step 6
Repayment Made
Then we will make a transfer directly into your bank account.
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DownloadCOMMON QUESTIONS
ANSWERED
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What is a unique tax reference number
A Unique Taxpayer Reference (UTR) number is like a special code that the government gives you to help them keep track of your taxes. It’s like a personal ID for your taxes. When you do things like file your tax return or communicate with the tax office, you use this number so they know it’s you. It’s unique to you and helps the government manage your tax stuff correctly.
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Will I have to make a payment on account
Construction Industry Scheme (CIS) workers who are also self-employed may need to make payments on account toward their tax liability. Payments on account are advance payments toward your future tax bill. Here’s how it works:
- Payments on account: If your tax bill is over a certain amount, HM Revenue & Customs (HMRC) might ask you to make payments on account. These are usually made in two installments: one by January 31st and another by July 31st.
- Who it applies to: Payments on account typically apply to people who are self-employed and whose tax liability after deductions (like CIS deductions) is more than £1,000. If your tax liability is consistently higher, you might have to make payments on account in the following tax year.
- How it’s calculated: Each payment on account is usually half of your previous year’s tax bill. So, if your tax bill last year was £2,000, you would make two payments on account of £1,000 each for the current year.
- Reconciliation: At the end of the tax year, when you file your tax return, HMRC compares your actual tax bill for the year to the payments you’ve made on account. If you’ve overpaid, you’ll get a refund. If you’ve underpaid, you’ll have to pay the difference.
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How do I know if I am CIS verified?
Being Construction Industry Scheme (CIS) verified means that the government knows you’re working under the CIS and that your tax status is correctly determined. Here’s how you can find out if you’re CIS verified in simple terms:
- Ask your Contractor: If you’re working for a contractor, you can ask them if they’ve verified your CIS status. They should be able to tell you if they’ve checked your details with the government.
- Get a letter: Sometimes, if you’re CIS verified, the government sends you a letter with your verification details. If you’ve received a letter like this, it means you’re all set.
- Contact HMRC: You can call the government’s tax office (HM Revenue & Customs) and ask them if you’re CIS verified. They can check their records and let you know.
- Online Account: If you have an online account with HMRC, you might be able to see your CIS verification status there. If you’re not sure, you can explore your account or call them to ask
Remember, being CIS verified is important because it helps make sure you’re being taxed correctly for your construction work. If you’re not sure, it’s a good idea to check with your contractor or contact the tax office to be sure everything is in order.
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Why didn't I get the rebate I expected?
If you’re expecting a rebate but didn’t receive one, there could be a few reasons for this. Here are a couple of possible explanations:
- Higher income: If your income from the Construction Industry Scheme (CIS) has increased this year, it’s possible that your higher income has led to a situation where you owe more in taxes than in previous years. This might be due to changes in your overall income level or changes in your tax deductions.
- Expenses and Deductions: Your rebate is usually calculated based on your total income, any tax deductions you can claim (like work-related expenses), and your overall tax liability. If your expenses or deductions have changed, this can affect the amount of rebate you receive.
- Tax Credits: If you’re eligible for any tax credits, these can affect your rebate. Sometimes, changes in your financial situation or eligibility for tax credits can impact the amount you receive as a rebate.
- Incorrect information: If there are mistakes or inaccuracies in your tax return, it could affect the rebate calculation. Make sure you’ve entered all your information correctly, including your income and deductions.
- Time of processing: Sometimes, tax processing can take time, and rebates might not be processed immediately. If you’ve recently filed your tax return, it might still be in the process of being reviewed.
- Government updates: Tax laws and regulations can change, and this might affect how rebates are calculated. It’s possible that there have been changes that impacted your situation.
To get a clear understanding of why you didn’t receive the rebate you were expecting, it’s best to consult with a tax professional or contact your local tax authority (HM Revenue & Customs in the UK) directly. They can review your specific situation, provide insights, and help you understand the calculations and any changes that might have affected your rebate.
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Will car sharing affect my rebate?
Yes, if you’re in the Construction Industry Scheme (CIS) and you share a ride (carpool) with your mate to get to work sites, you might be able to claim mileage expenses. These expenses could be part of your work-related costs. Here’s a simplified explanation:
- Mileage expenses: If you use your own vehicle to travel to work sites and share a ride with your mate, you can claim mileage expenses for the distance you travel. The mileage rate is a specific amount per mile that the government sets for tax purposes. You can use this rate to calculate how much you can claim.
- Proof: To claim mileage expenses, you’ll typically need to keep a record of your journeys. This can include details like the date, starting point, destination, and the number of miles traveled. This record helps show that the travel was work-related.
- Shared rides: If you and your mate are both traveling to the same work site together, you can still claim mileage for the distance you travel. You might need to divide the claimed mileage by the number of passengers (you and your mate) to accurately represent your share of the travel cost.
- Tax Benefits: Claiming mileage expenses can help lower your taxable income because it’s considered a work-related expense. This means you might end up owing less in taxes.
It’s important to note that while claiming mileage expenses can be beneficial, you should make sure you’re following the rules correctly. Keep accurate records of your travel, understand the specific mileage rates, and consider consulting a tax professional to make sure you’re claiming expenses appropriately within the CIS framework.
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Can I claim my refund before tax year end?
Unfortunately not, you have to wait for the relevant tax year to finish which runs from April to April before you can submit your cis tax return and potentially receive any repayment.