CIS Workers: How to Claim Back CIS Tax from HMRC 💰
The end of the tax year is coming up on 5th April and what does this mean for CIS (Self-employed) workers?
If you’ve worked in the industry for some time, you’ll be familiar with this process and you may already have a great accountant, and this blog may not be for you (unless you have been working through CIS and haven’t been filing a tax return!)
To those new to the industry, perhaps this is your first year of working through CIS and this may be your first time having to think about doing a tax return?
This is not something that is reserved for the high earners in construction – in fact, if you earn below the threshold, it is even more important that you do a tax return as you may be owed money back.
It doesn’t have to be a daunting as it sounds, I worked for years as a self-employed subcontractor through the CIS (Construction Industry Scheme) and found that the easiest way to sort everything out was to use a professional CIS tax accountant.
Here are some tips on what you need to do to get this sorted and hopefully have a payday coming your way if you have overpaid your tax:
Top tax tips for CIS workers:
- After the end of the tax year (5 April), you can complete and file your tax return.
- Get in touch with a professional accountant
- Collect all your payslips for the year (CIS payslips and non-CIS payslips)
- Send these payslips to your accountant
- Receive your tax rebate straight to your bank account!
If you are looking for a recommended tax accountant then sign up to Fixed and get access to our discounts!
Q&A
- How do I know if I am owed anything? This will depend on your earnings throughout the year, but the easiest way to check is to use a certified CIS tax accountant. Very high level they will be able to tell you based on an estimate of your earnings if you are owed anything.
- How do I know what my CIS status is? This is pretty straightforward, if you have a UTR (unique taxpayer reference) then as a CIS worker 20% (or 30% for those who do not have a UTR) of your earnings are withheld upfront for taxes. This system means you could be overpaying tax, meaning you could be owed a refund at the end of the year!
- How much will this cost me? A tax accountant will cost around £300 for them to do your return. There are cheaper and more expensive ones but as a rule of thumb this is around average.
- Why should I spend £300 on an accountant? They will take the money out of your return so you will not have to pay anything up front. Depending on your earnings a good accountant can get you thousands of pounds back in a lump sum, now that is a good day!
- I don’t have money to pay for an accountant, what can I do? A good accountant will take their fee out of your return so it will be no money up front, but make sure you check with them first before agreeing anything.
- Will I definitely get money back? If your earnings are above the CIS tax threshold, you could owe money to HMRC. Either way, it’s important to have a picture of your tax position as you can be sure if you owe money, they will come after it either way, but perhaps not the other way around!
- How much could I get back? This totally depends on your earnings and your expenses, but I’ve previously been paid back a couple of thousand pounds that I was owed!
- How do I get registered with a tax accountant? They will help you with the process but they will have to be authorised by HMRC (this can take up to 10 days to arrive in the post). Once you have the authorisation code, share it with the accountant, and they can crack on.
- What is the deadline for doing my tax return? The tax year ends on the 5 of April each year and the new one starts on the 6 of April. The sooner you submit you return the sooner you can get your rebate but you have until the following January 31 to complete and file your return.
- What do I need to send the accountant? Collect and send all your payslips throughout the year, some companies / payroll companies will send you an end of year summary. This can be quite a task especially if you have been working for multiple companies over the year!