Self Assessment Tax Returns For Construction CIS
19th March 2020
When you're self-employed in construction you get your independence and the sense of genuine accomplishment that comes from building your own business. Along with all that freedom, though, you also get up-close and personal with the taxman. No one enjoys having HMRC breathing down their necks, but it's the price you pay for being your own boss.
It's not just the self-employed who get the taxman sniffing around their finances, either. Even if you're taxed through the Pay As You Earn (PAYE) system, you can still find yourself getting chased for information (and money) by HMRC. If you're claiming your yearly tax refunds for things like travel to temporary workplaces, for example, you'll almost certainly need to sign up for Self Assessment tax returns to get your cash. If the expenses you're claiming for stack up to £2,500 or more, you'll need to file a tax return as part of your claim.
Getting ready for Self Assessment
When you use the Self Assessment system, you've got to get cosy with all of its rules and deadlines. You'll get slapped with penalties if you miss a key date for payment or paperwork, and you'll need to show proof of the money you've got coming in and going out. That means keeping track of your expenses and hoarding receipts as if they were cash. If you've got other sources of income, like savings interest or rent, HMRC will want to know about those, too. Bank statements are always useful documents to keep, along with invoices and so on.
When the tax year rolls over on the 6th of April, you've got until Halloween to file a paper tax return, or until the following 31st of January if you're using the online form. For most people, filing online is probably the better choice. You won't have to worry about anything getting lost in the post and you'll have less homework to do as the system crunches a lot of the numbers for you.
That 31st of January deadline is also the last date for paying up what you owe, by the way. That's one of the big reasons why it's best to file your Self Assessment returns early. For one thing, you won't get wrong-footed and have to scramble around to pay up at the last minute. You'll also have more time to sort out any problems if you think the taxman's got his numbers wrong.
Getting help from RIFT
If you team up with RIFT, we can sort out all your Self Assessment hassles for you. We're always up-to-date on HMRC's ever-changing range of regulations and thresholds, so you'll never get caught out by a rule change. 19 times out of 20, our construction customers end up with a tax rebate when they file their Self Assessment returns with us. It's not just pennies, either. Average construction refunds come to about £2,000 a year. Better yet, our unique RIFT Guarantee means that once we've calculated what you're owed, that's what you'll receive. As long as you play by the rules with the information you give us, if HMRC disagrees with your refund amount and demands some back, we'll pay it from our own pockets, not yours!
Registering for CIS
If you're shifting from PAYE work to self-employment, you need to sign up for the Construction Industry Scheme (CIS). With RIFT's help, naturally, this is no hassle at all. Even if you've made the change part-way through a tax year, we can still sort out both your tax refund and Self Assessment tax return for you.
Depending on your situation, you might count as a contractor, a subcontractor or both. Either way, we'll make sure you always know exactly where you stand and what you have to do. The CIS system means that construction contractors have to file returns each month and keep full records to avoid penalties. For subcontractors, CIS means that their cash it taxed at 20% before they even get it. It's supposed to be an advance payment against the tax you'll owe, but it can leave you paying too much. Again, though, this is something RIFT can sort out for you so you never lose out.
The CIS scheme covers most kinds of construction work done in the UK, from site preparation to decoration. There are a few exceptions, whether based on the work being done or the business doing it (if you qualify for gross payment status, for instance), but the odds are you'll find yourself dealing with CIS most of the time.
Switching to self-employment and CIS can be a little nerve-wracking, and there are plenty of regulations to keep on the right side of, but RIFT can keep the whole process smooth, simple and stress-free. Here's a basic run-down of how it works:
- Get in touch
Get talking to RIFT and we'll send you a free CIS Starter Pack. Your pack contains all you need to keep your records spotless for your first year in business. This is essential if you want to keep your tax bill down.
- Get registered
We'll sort out a convenient time to give you a ring to chat about what you need to do, then we'll contact the CIS Registration Line together. If you've got any questions, we'll answer them. After that, we'll explain how your National Insurance works.
- Get earning
Making the most of self-employment means keeping your tax situation under control. That starts with making sure your Self Assessment and CIS registrations are done properly. Having RIFT on your team is the best first step you could take.
You can read more about how RIFT can help on our Switching To CIS page.
RIFT are the UK's leading tax rebate and tax return experts who've been in the industry since 1999. If you think you could be owed tax back, use our free tax rebate calculator to get an instant estimate of how much your HMRC tax refund could be.