How To Avoid CIS Tax Refund Scams and Get What You're Owed

If you're working CIS then you already know the taxman's game. 20% of your wages disappear before you even see them. The Construction Industry Scheme was designed to clamp down on tax evasion, and some would argue it's done that. On the other hand, when one dodgy door closes another always seems to open.

You might not see so much of the "cash-in-hand, no-questions-asked" system on sites these days. However, crooked tax advisers are coming out of the woodwork to take advantage of construction workers who don't know the rules. Make no mistake; if you're working CIS then there's a good chance you're owed money by the taxman. An unscrupulous tax advisor could end up costing you a lot more than his over-inflated fee, though.

If you've got an email, call or text that says it's from us and you want to check if it is genuine then have a look at our Did We Call You page. All calls and texts from us will come from 01233 628648. If you see one, or if we leave you a voicemail, please do read it or get in touch as we probably need to just check something. Not being able to reach you if we have a question is the biggest cause of delays in getting rebates paid out.

Knowing the rules about claiming expenses.

Here's how the scam artists get you. As a CIS subcontractor, you're losing a fifth of your income to the scheme. If you're making under £30,000 or so, you'll probably end the tax year having forked over more than you owe.

It's not so bad, of course, because you can claim it back. In walk the dodgy advisers. They start waffling on about the expenses you can claim for to ramp up your refund, and they're not wrong, you can claim expenses but there are strict rules about what counts and this is where most people rely on expert help. Working CIS, you've got a range of expenses you can claim tax relief on. Materials, tools, equipment and travel to temporary workplaces can all count. If you're not claiming for them, you're basically sucking money out of your own tax refund.

The problems start when a dodgy adviser starts pumping up his fee by claiming for things you aren't allowed to. The bigger your refund, the bigger his cut of it. So he starts adding in your mortgage costs, private travel and other little extras that don't count.

Perhaps he actually throws in some costs you never even had! He probably doesn't tell you he's doing it - but that's not much comfort when the taxman starts breathing down your neck.

What happens when the taxman finds your claim is wrong?

The wheels can turn slowly at HMRC. It might take a year or more for them to catch on to what's happening.  If your accountant sends in a claim in your name, though, it's legally your problem when it's challenged. By that time, of course, your adviser's nowhere to be found and you're stuck with a penalty or worse

And it does get worse. You might find that your "advisor" just pocketed his up-front fee and never even processed your claim. You might get lumped with hidden charges that swallow up any refund you do get. If you feel like you're stepping into a minefield, then you're half-right. You're still better off getting professional advice when you make a refund claim. You just have to know where to get it.

What are the warning signs of a CIS tax refund scam?

If you're in construction, then you already know how to read warning signs. Here are a few new ones to keep an eye out for when choosing a tax adviser:

  • Did your adviser fail to show you a calculation of your refund?
  • Did he "forget" to give you a copy of your tax return?
  • Do the expenses claimed not match your receipts? Did your adviser even ask for receipts?
  • Did the letter explaining the fee you'd be paying somehow never turn up?
  • Does your adviser prefer a nod and a handshake over a written record of your arrangement?

Remember - the taxman isn't trying to screw you out of money you don't owe. Don't make the mistake of trying to cheat him. If any of those questions are setting alarm bells off in your head, then play it safe and walk away. Measure twice, cut once. There are plenty of perfectly reputable accountants and advisers out there. You won't have to look hard or long to find one.

How can RIFT help me?

At RIFT, we've been handling tax refund claims for construction workers as long as we've been around. We started up in 1999, and we've always kept on the best of terms with HMRC. We'll always make sure you get the refund you're due. Crucially, though, we'll never claim for anything you aren't owed. That's why we've never had a refund claim rejected by the taxman, and that's why we offer our unique RIFT Guarantee. Suppose the sky fell and HMRC ever demanded any of your refund back. Our guarantee means we'd pay it ourselves, at no cost to you!

An average 4-year tax rebate claimed through RIFT comes to £2,500. Use our tax refund calculator to get an instant estimate of how much you could be owed. We've got no hidden charges, and don't charge a penny until your refund's been paid. Get in touch by phone or email, and we'll make sure the taxman always plays fair with you.