The Construction Industry Scheme (or CIS) is a special way of taxing
self-employed workers in the construction industry. It is an anomaly amongst the self-employed in that tax is deducted at source (much like PAYE), but no relief is given at source for allowable expenses or for a personal allowance. With this in mind, the vast majority of those in the Construction Industry Scheme should be due a tax refund each year.
Our service includes CIS subcontractor registration (if necessary), the completion of tax returns, advising you of your tax liability and the due payment dates (including any payments on account) and any ad hoc advice throughout the year.
In order to prepare your tax return we will also prepare a set of trading accounts to calculate taxable profit in the year.
Many subcontractors are unaware of the types of expenses that can be claimed, but we are experts in identifying these.
Allowable expenses include but are not limited to:
• Accountancy Fees (Think Tax Fees!)
• Use of your home as an office
• Use of garage, if the van, tools or any materials are stored or
• Public liability and other commercial insurance premiums.
• The cost of tools and materials
• Telephone calls and internet costs used for business
• Subsistence and accommodation, where a subcontractor is working away from home (in some situations).
• Paper, postage and other office consumables
It should be noted that all the usual requirements of self-employment and self assessment apply to CIS subcontractors but there are some special issues too. Key dangers include:
• Failing to register as a subcontractor
• Double tax withholding
• Identity fraud
• Inflated refunds –and unscrupulous advisers (many advisers work on a commission basis – these should be avoided!)
• Employment status issues: are you employed or self-employed?
• Failure to register as a contractor when paying people who help you on a job