If you work in any type of construction or labouring job, you will almost certainly be entitled to claim a Construction Industry Scheme (CIS) tax rebate. And we aren’t talking small numbers here either. The average take-home rebate is over £2,500.
We’ve helped joiners, builders, plumbers, groundworkers — just about everyone working in some type of construction job.
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Find out how much CIS tax you could be owed with our CIS tax return calculator. This way you can quickly estimate your CIS tax return online.
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What is the meaning of CIS (the Construction Industry Scheme)?
What is CIS? CIS or ‘Construction Industry Scheme’ tax is a type of tax that the government uses to collect income from people working in construction or construction-related roles across the UK. These deductions are then sent on to HMRC. They basically count as advance payments towards the tax and your National Insurance that you pay anyway.
The HMRC does this as a way to prevent tax evasion. But what often happens is too many honest, tax-paying people end up paying too much tax as a consequence.
What work does CIS cover?
You are almost certaintly involved in a CIS scheme if your work includes any general building work, including:
Site preparation work (such as laying foundations)
Painting and decorating
Installing systems such as water, lighting, HVAC units & more Solar panel installation
Cleaning buildings and interiors at the end of construction work
If you are unsure if your work qualifies, we can check this for you.
What work does CIS not cover?
There are some jobs that are not covered by the CIS scheme, even though they might seem like they should be. Those are:
Scaffolding hire — but only if there’s no labour involved Carpet fitting
Surveying and architecture work
Making the materials that are used in construction
Delivering materials to construction sites
Work that isn’t construction related, even if it takes place on-site (such as working in a canteen)
BUT you can still claim CIS tax returns if you are working one of the jobs listed here ALONG WITH a job that is covered by CIS. In fact, in that case, you can invoice all of the work under CIS.
So even if, for example, you did some painting and decorating, and then some carpet fitting, you would still be able to claim CIS tax on the whole sum — including the carpet fitting. Even though carpet fitting wouldn’t normally be covered.
What is the CIS tax deduction rate?
HM Revenue and Customs (HMRC), according to their official website, makes the following deductions:
20% for registered subcontractors
30% for subcontractors who are unregistered
0% for subcontractors with ‘gross payment’ status
As you can see, by registering you can save 10% on your CIS tax deductions. You can do this by giving your employer your Unique Taxpayer Reference (UTR) number.
If you don’t know this, we can get a UTR number sent out to you quickly.
HMRC like to have your UTR number so that they can easily see who you are. If your employer does not have it and show it to them, then the taxman will effectively punish you by increasing your overcall CIS decuctions to an extra 10% of your total wages.
How do CIS tax deductions work?
Because it is a type of tax, your boss (the contractor) basically deducts money from your payments, before you are paid. These deductions are then sent on to HMRC. They basically count as advance payments towards the tax and your National Insurance that you pay anyway.
The HMRC does this as a way to prevent “cash-in-hand” tax evasion. But what often happens is too many honest, tax-paying people end up paying too much tax as a consequence.
Here’s all the information you need to get a CIS tax return
The first thing you will need to do is gather as much information concerning your work as possible. The more information you can get, the more money you can get out of your CIS tax rebate.
What is a CIS self-assessment tax return?
A CIS self-assessment is basically a way of disclosing your earnings to HMRC. This must be done every financial year if you are self-employed. As it is a way for the HMRC to check whether the advance tax contributions — your CIS deductions — have been overpaid or underpaid.
A CIS self-assessment tax return is when HMRC finds out that you have overpaid on your tax contributions and returns that money to you. But if the government can avoid paying out, they will. Not to mention the fact that completing a CIS self-assessment can be long, confusing and boring.
That’s why so many people ask the tax experts to look over this on their behalf. And because experts can look at everything very closely, they often find that HMRC owes you even more money. Meaning that, a lot of the time with expert help, your CIS tax rebate is even larger than if you did it yourself.
How do I get started with my CIS tax return?
Here are some useful documents and records to help maximise your CIS tax return:
Any copies of CIS tax statements that you have (they are sometimes called ‘CIS vouchers’ or ‘CIS pay slips’)
Information about the places you have worked on
MOT certificates that show how much mileage you have done
Invoices for work-related tools and equipment you have purchased
Obviously it won’t always be possible for you to have the records of everything, but the more information the better.
If in doubt, just let us know and send it over anyway. We can always tell you if a particular receipt or record will be useful or not. It’s better to have it and not need it, and having it could contribute to your CIS tax refunds.
Can I make a CIS tax claim myself?
You certainly can claim CIS by yourself. But as it's the government you’re dealing with, you can bet it is a long, tiring, and complicated process. Here’s what you need to complete a CIS self-assessment tax return:
Visit the HMRC site to register for a self-assessment tax return
Once CIS registered, fill out the SA100 form
Enter in your Unique Tax Reference (UTR) number
Work out all of your income during the financial year, including any additional income (such as property income) if applicable
Work out all of your losses during the financial year
Add up all of the deductions made from your pay during the financial year — these should be visible on your payslips
Add up all of your business expenses and declare them to HMRC
Make sure you submit everything before the tax return deadline — otherwise you will be fined
If this all feels overwhelming, you’re not alone. That’s what we are here for. Our experts will thoroughly look over every tiny detail, in order to maximise your CIS rebate. So that you can get as much money back as possible, all with the click of a button.
What do I need my CIS payment and deduction statements for?
Everytime you get paid for your work, your boss or employer must provide you with a CIS payslip. They are legally required to do this.
Once you have them, it’s important you hold on to them. So that when you complete your annual Self Assessment tax returns you have all the necessary information at hand. You will need to notify HMRC just how much money you are earning. This will also help to show HMRC all the CIS reductions that have already been deducted from your wages.
A lot of the time, hard working people who lose 20% of their earnings to CIS deductions don’t always get the full benefits of their tax-free Personal Allowances. But in order to finally GET all those benefits, you will need to prove that you have been making CIS payments. And for that, you’ll need the CIS paperwork to back up your claims.
What is a Construction Industry Scheme payment and deduction certificate?
When a contractor (your boss) makes a CIS deduction they must provide you with a CIS payment and deduction statement. This is the written evidence which you can use to prove any tax deductions with HMRC. There are lots of different names that refer to this written evidence. ‘CIS statement’ and ‘CIS certificate’ being two examples — but they all refer to the same thing.
When do I have to complete a CIS self-assessment tax return by?*
The current tax year ended on 5 April 2020. There are two ways to complete a CIS self-assessment tax return: online or with a good old fashioned pen and paper and via post.
The deadline for completing the CIS tax return via paper and post was at the end of October. It’s longer for online applicants. Anyone completing an online self-assessment tax return has the deadline of the end of January 2021.
What happens if I miss the deadline for a CIS self-assessment tax return?
You will be fined £100 by HMRC. Even if you have no tax to pay, or if the tax due is paid after three months. To make things worse, HMRC will continue to increase your fine by £10 a day for each day after the deadline you miss (up to a maximum of £900).
If you miss the deadline by more than 6 months, then you will be fined an additional 5% on your tax — or the sum of £300 (whichever is the most money). Another 5% or £300 will be added again on to this overall amount if your return is more than 12 months late.
Do most CIS workers get their full tax rebates?
If you choose to file your own Self Assessment tax returns, then you almost certainly will not get the full rebate you are entitled to.
This is because, if you aren’t an expert, it’s easy to miss out on CIS claims or to make mistakes. Most people do not realise the extent to which they’ve been overcharged by HMRC when they file their own taxes. In extreme cases, some people don’t even get a CIS rebate. Or if they do, it’s a massive undercalculation of what they deserve.
This is where we come in. Our experts closely scrutinise every aspect of your taxes, to see what you are entitled to. In order to claim back the highest number possible.
How do I qualify for gross payment status?
If you have gross payment status, you won’t have to pay any CIS deductions at all. Contractors will not automatically take 30% or 20% from your pay before paying you. But you will still have to pay your tax and national insurance at the end of the tax year.
Before you can apply for gross payment status, you will first need to register as a CIS subcontracor. You can do this by giving your employer your Unique Taxpayer Reference (UTR) number. If you don’t know this, we can get a UTR number sent out to you quickly.
Then you can visit the HMRC website and fill in a CIS302 form to register for gross payment.
Does CIS apply to business outside the UK?
CIS applies to work that is done in the UK, by businesses that are both based in the UK and abroad. So as long as the work you have done was in the UK, you could be looking on a CIS tax refund. Even if your business is based overseas.
I only work for one company and my pay is taxed before I get it — so am I PAYE or CIS?
Employment status can get very complicated in construction. Especially if there are large numbers of contractors, subcontractors, agencies, and more all involved. It might seem like you are working under PAYE conditions at times. And you might have colleagues working under very similar conditions who ARE working under PAYE conditions. This can cause confusion, and is why it's so important to check.
To find out, check what it says on your payslips. If you can see a 20% deduction and the words “CIS statement” then you are paying CIS deductions. (However, if you feel you shouldn’t be paying CIS tax, then talk to your boss.)
The slightly different CIS and PAYE conditions can confuse even experienced workers. So take everything you hear from your mates and colleagues with a pinch of salt. If you have questions, it is far better to speak to the experts.
How long does a CIS tax refund take?
CIS tax rebates can take anywhere between 1 — 10 weeks for HMRC to process. But with the right care and proper handling this can be a lot quicker. Our CIS experts average a little over a week (7 — 10 days) for a payout. So you can get the money you are entitled to faster.
What costs can my CIS tax rebate cover?
You can claim back any work expenses that HMRC consider to be allowable for tax relief. Including:
Capital expenses — for example if you buy a laptop that you use only for work, you can claim back on that purchase
Motor vehicle costs, providing the vehicle is used exclusively for business — including things like fuel, insurance, mileage and road tax
Any tools or equipment that you have paid for or have had to replace
Costs incurred from buying or washing uniform
Travel costs if you have to move from one site or location to another as part of the job
Subsistence costs, including meals, tolls, congestion charges, parking charges, the cost of business phone calls — everything you have to do on the job
Any “remaining admin costs” that relate to your work, but that aren’t listed above
General business expenses such as public liability insurance
CIS v. PAYE — What expenses can I claim?
|Capital expenses (incl. motor vehicles, PCs,mobile phones)||Yes — if they are for business use only||No|
|Motor vehicle expenses (incl. road tax, car insurance, fuel)||Yes — if they are for business use only||No|
|Tools & equipment expenses (incl. purchases, hires, protective clothing)||Yes — however you can only claim back on compulsory protective wear, you cannot claim back if you have a standard uniform||Yes — but only if you had to purchase your own tools and equipment because your employer couldn’t provide them|
|Travel & subsistence (travelling, eating, overnight stays)||Yes||Yes — but only if you are travelling to a place of work for a temporary time period|
|Remaining admin costs (incl. stationary costs, postage costs, phone call costs)||Yes||No|
|General business expenses (incl. public liability insurance, trade union fees, etc.)||Yes||Yes — but only for trade union fees and subscription fees|
What is a subcontractor?
A subcontractor can be either a firm or an individual person who carries out work for a company as part of a larger overall project. Subcontractors get paid by contractors for the work that they do and are eligible for a CIS subcontractor tax return.
How to register as a subcontractor?
You don't have to register if you are a subcontractor, but you will be charged 10% more (30%) if you don’t. You can save money by registering. To do this, give your employer your UTR number. If you don’t know your UTR number we can sort this quickly for you.
How do I deregister as a subcontractor?
To deregister from the CIS, your contractor should write to the HMRC on your behalf, citing evidence that the work you are doing is no longer within the CIS. You will still have to pay your CIS deductions until the HMRC recieves and is satisfied with the contractor’s paperwork.
Who counts as a CIS contractor or CIS subcontractor?
If you are working over other self-employed workers doing construction work then you are a contractor and so must register as such under the CIS. If you are doing construction work for a larger project, then you are likely a subcontractor. If you aren’t sure, we can help you determine if you are a contractor or subcontract. Just contact one of our experts.
The world has been rocked since the coronavirus lockdowns disrupted a lot of construction work. If your finances and work situation has been impacted, then you can still get some help.
UTR Numbers and Self-Employment Income Support
As of 26 March 2020, a new support scheme was announced by the UK government to help self-employed people. Simply called ‘Self-Employment Income Support’. But to find out if you are eligible — and to apply for it — you will need your UTR number.
You will need to meet certain other conditions to apply for Self-Employment Income Support:
At least half of your income must come from self-employment, and you cannot be earning more than £50,000 profit from it
You have filed a 2018/2019 tax return
You aren’t a company director paying yourself a salary, or sharing dividends
You can prove you have lost business/income as a result of the coronavirus pandemic
If you meet all of the above, the government will cover 80% of your average monthly earnings over the last three tax years.
Although you won’t earn more than £2,500.
Can I still claim a CIS refund if I applied for a government loan scheme?
Yes. If you received any money from the Self Employment Income Support Scheme, then this will also be treated as income on your Self Assessment. This is because the money you will be receiving is a grant and not a loan. It will still count as taxable income. Meaning you can claim CIS tax returns back on it.
What's a UTR number
A UTR number is your Unique Taxpayer Reference number. It is a 10-digit number. Every single taxpayer in the UK has their own UTR number. You will need your UTR number if you are registering for self-employment or as an individual in part of a company or partnership.
Usually, your UTR number is on any letter addressed to you personally from the HMRC. However if you do not know it, we can find your UTR number quickly.
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Here Are Your Most Asked Questions
Q1: How do I claim my CIS refund from HMRC?
You can do this online or via the post. For online, visit the HMRC website. There you can claim a repayment online using the CIS rebate form. (You will need your Government Gateway user ID and password beforehand.) To claim via post, you will need to write to the HMRC explaining why you might have overpaid, along with your bank details and PAYE reference numbers.
Q2: How long does it take to register for CIS?
About 4 weeks. Once you have handed your UTR number over to the contractor or your boss, it can take a month for HMRC to get back to you. In the meantime, unfortunately, you will still be charged 30% worth of CIS deductions. But once registered this number will drop to 20%. You will be able to reclaim your overpaid deductions at the end of the financial year.
Q3: Can you opt out of CIS?
No, you cannot opt out of CIS if the work you are doing falls within the CIS scheme. But you may be able to apply for ‘gross payment’ status. Which means you wouldn’t have to pay any CIS deductions at all. However, special conditions are required for this. To apply for gross payment status, visit the HMRC and fill in a CIS302 form to register for gross payment.
Q4: How do I avoid CIS deductions?
You cannot avoid CIS deductions if your line of work has you enrolled within an CIS scheme. Unless you have ‘gross payment’ status. But you must meet certain conditions to be eligible for gross payment status. For most people, you can REDUCE the deductions by registering. Your CIS deductions are automatically 30% of your pay before registering. But once you register, your deductions will reduce to 20%. It is also likely that you will be able to claim some of your deductions back as a CIS tax rebate when declaring your income on your annual Self Assessment.
Let our experts get your CIS return over to you quickly and stress-free
Sorting your own CIS tax return is often complicated, boring and hard to do. And because more people don’t really know how to do it, they end up getting short changed by the tax man.
Our CIS experts won’t let you get short-changed. We will closely study all of your tax details, giving you the maximum claim you are entitled to.
You won’t have to worry about filling in your Self Assessments improperly or missing deadlines with our service, either. Say goodbye to boring, confusing paperwork, and hello to bigger, better tax rebates — the money that you have earned and that you deserve.