Wondering if you can claim a tax refund or need to submit a tax return? Use our online tools to find out if you're owed money by HMRC.
CIS Contractor Tax Returns
If you are working via the Construction Industry Scheme (CIS), you’ll be required to file a self assessment tax return after your first year of trading and subsequent years. You’ll complete your tax return at the end of the tax year in April and pay any taxes that are due by the following January.
Tax Returns for CIS
CIS Tax Returns
CIS tax returns are a fact of life for most people in the building trade. A mistake when filing a CIS tax return online can mean paying far too much tax on your pay. That's why RIFT has a specialist team of experts to offer CIS return help to construction industry workers. Take a look at our tax return calculator to find out more.
When you're paid through CIS, your contractor has to chisel off a hefty chunk of your pay before you get it. That money goes straight to HMRC. It's supposed to act as "advance payment" toward the tax and National Insurance you'll owe. Your contractor doesn't have any choice about this; it's just how the law works. From a subcontractor's point of view, though, it can be pretty painful. In effect, you're being taxed right from the first penny you earn, without getting your tax-free Personal Allowance. It's supposed to crack down on tax evasion in the construction industry, but in reality it's the honest subcontractors that are carrying the load.
The news isn't all bad, though. You can claim back the extra tax you've paid in your Self Assessment tax return. That's right: even though you've already had 20% of your money taken by HMRC, you still have to file a return. If you've paid too much tax, you can get a tax refund.Tax Return Quote
CIS Payment and Deduction Certificate
Do I pay tax if I'm CIS?
Yes, you will pay tax “at source” (your tax is taken off your wages before you get them), most likely at the rate of 20% of your income.
However, this doesn’t mean you are “employed”. You still count self-employed under CIS – even if it doesn’t feel like it. The big difference is that this means you'll still have to do Self Assessment each year. Not filing those tax returns each year brings three very serious problems your way:
- You're not getting your tax-free Personal Allowance.
- You're not getting any of the tax relief you're entitled to for your work expenses.
- HMRC's going to come after you for failure to file!
If you're getting CIS statements and don't understand why, get in touch with RIFT straight away. We can explain the system, make sure you aren't paying too much tax and keep you out of trouble with HMRC.
CIS Payment and Deduction Certificate
I'm self-employed, but I'm not getting any CIS statements from my contractor. What should I do?
There are strict rules for CIS contractors about payment and deduction statements. They need to send you one every time you're paid, with specific deadlines to hit.
If you haven't been receiving yours, don't panic. It may just be a simple admin mix-up. Get in touch with your contractor and ask for your certificates, so you can keep your Self Assessment records up-to-date.
Don't just ignore the problem. If it turns out your contractor's not been doing things correctly with HMRC, things could get awkward for you in a hurry, come the end of the tax year. If you still have no luck, come to RIFT for advice and help. We're experts in sorting out tax problems for UK construction, and we'll get straight to work.
CIS Tax Returns
Do I need to do a tax return if I'm self-employed?
If you're self-employed in any kind of business, you'll almost certainly be using Self Assessment to pay your tax. In the construction industry, you'll probably also have to deal with the Construction Industry Scheme (CIS). Subcontracting under CIS means your Self Assessment filing has a couple of extra points to consider. If you don't understand the system, it's easy to end up paying a lot of extra tax you don't owe. If you think you are due a tax rebate check out our CIS tax refund pages.
CIS Tax Return Accountants
Already have an accountant? No problem!
Switching to RIFT couldn't be easier. If your current accountant's registered as your agent, we'll get you a new 64-8 form to sign. If needed we'll even explain everything to your old accountant, or give you a template of what to send to them, to cut out the hassle of you needing to have any awkward conversations.
A lot of people with their own accountants come to us for Self-Assessment tax returns if they’re working under CIS because our industry expertise means we can maximise your rebate. Our deeper specialist knowledge means we can easily handle those extra tricky and unusual rules that apply to CIS returns that a more general accountant may not know about. We charge a simple fee instead of an hourly rate, and even include all help and aftercare throughout the year. That's why so many people end up moving everything to RIFT.
If you're after a more in-depth or ongoing service, if you have a Ltd Company or are VAT registered, you should check out our full RIFT Accounting service. This is a great way to protect and grow your business, and it's ideal for Limited Companies and Partnerships. Packages cost as little as £45 per month. Find out more about RIFT Accounting.
What is a UTR number and do I need one?
A UTR (Unique Taxpayer Reference) number is a 10 digital code that's unique to either you or your company. Your UTR number identifies you personally with HMRC for things related to your tax obligations.
You'll need this when you:
- Register for self assessment
- Set up a limited company
- Register for the Construction Industry Scheme
Don't worry though we can help organise all of this for you. To read more about UTR numbers click the link below.UTR Number
CIS Contractor Tax Returns
What expenses can I claim for?
A key part of working with the Self Assessment system is understanding what expenses you can claim for. This is an area where a lot of people on Self Assessment miss out, and end up paying too much tax. Examples of allowable expenses in construction include:
- Work travel costs.
- Essential tools and equipment.
- Materials you need for work.
- General costs of running your business, from stationery to advertising.
- Accountancy fees.
These are the essential costs of doing business, and they count against the income you're being taxed on.
Passing CIS work on
I work CIS. Can I pay someone to take on jobs for me?
Self-employed CIS workers can sometimes pass work on to other people. However, there are strict rules about doing this, and breaking them can lead to serious trouble. HMRC has a real problem with people in CIS work paying cash-in-hand for others to do jobs for them. It doesn't matter if you're passing the work on to friends, colleagues or family. You still have to follow the rules.
What are the rules for passing CIS work on?
The first thing to know is that passing your CIS work on makes you a contractor in HMRC's eyes. That means you have to register yourself to avoid serious trouble from the taxman. You can't just slip someone a fistful of banknotes on the sly and sort things out later. You need get yourself registered before you take on your first subcontractor.
After that, you need to be sure your subcontractors are signed up for CIS. When you pay your subcontractors, you have to take CIS deductions from their pay and send them to the taxman. You'll also need to file returns every month and keep detailed CIS records. If you slip up, or ignore the regulations altogether, you're looking at some painful penalties.
Can I claim the money I'm paying subcontractors as a business expense?
As long as you're following the rules, then the cash you're paying the people you give the work to counts as an expense. That means it will bring down the amount of profit you're paying tax on. If RIFT is handling your tax returns, of course, we'll handle all of this for you as part of the service.
What happens if HMRC launch an enquiry into my CIS returns?
If you've been passing some of your CIS work on, then you need to have good records to show the taxman. HMRC will expect to see detailed evidence of the wages you've paid out, for instance. In addition, they'll also want to see the details of the people doing the work for you. Names, addresses and their Unique Taxpayer Reference numbers will all be needed. Again, RIFT will handle all the sticky HMRC business for you to keep you within the regulations and out of trouble.
RIFT was first founded to help construction workers tackle the taxman. We've grown a lot since then, but we always remember where we started. We're still the leading experts on taking care of the UK's construction industry. We're on great terms with HMRC, and know the business inside and out. Whatever tax problems or questions you've got, talk to RIFT.
The Self-Employment Income Support Scheme
The Self-Employment Income Support Scheme (SEISS) is designed to help self-employed people get through the COVID-19 crisis. With the 4th round of SEISS grants, the rules on who qualifies were loosened up slightly. You should be okay to claim if:
- You filed a Self Assessment tax return for 2019-20 by the 2nd of March 2021.
- Over half of your earnings come from self-employment.
- You’ve been making under £50,000 a year on average over the last 3 years.
- Your business has suffered significantly as a result of COVID-19.
The 4th SEISS grant pays out 80% of your average profits over 3 months, capped at £7,500, worked out using your last 3 years of profits. If you became self-employed more recently than that, only your time in self-employment will be used to make the calculations.
A final SEISS grant is coming later in the 2021, to be claimed from around the end of July. Only people who’ve seen a 30% drop in their average turnover will get the full 80% pay-out (capped at £7,500) this time. If your turnover’s dropped by less, you’ll get a 30% grant level instead, capped at £2,850.
If you’re eligible for a SEISS grant, you should be contacted by HMRC with instructions and a personal claim date. See our FAQ here for more about the scheme.
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We pride ourselves with being the first company in the tax sector to be awarded ServiceMark by the institute of Customer Service. That's because we're known for our friendly, helpful and jargon free approach to tax matters. But don't just take our word for it, check out our reviews. We invite our customers to tell us what they think about their experience with us on TrustPilot.co.uk, an independent reviews site.Read our reviews
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