VW Taxation Ltd
CIS Tax Return Services
CIS Tax Specialists in Portsmouth
When it comes to Tax and National Insurance payments within the Construction Industry Scheme (CIS), a higher rate is, unfortunately, the normal course of events for construction workers. This is entirely understandable based on the hard work and commitment that you put into your job, with a tax system that is far from perfect.
Based on the current model, CIS deductions frequently do not get properly logged and filed, costing construction workers higher returns on a tax refund in the process. Although the construction industry cannot escape CIS tax regulations, the process of filing a tax return and receiving a tax refund is simple with the right amount of guidance from a taxation specialist like us.
This guide will provide you with all of the essential information about the CIS tax return process to make sure you have a full understanding of how the process works.
What is a CIS Tax Return?
For that matter, what is CIS? The Construction Industry Scheme was established by HMRC to impose a tighter grip around taxation and revenue of work performed by both contractors and subcontractors within the construction industry. The scheme has never been perfect, with many sole traders frequently not seeing the benefits of possible CIS deductions.
If you are performing building work, a requirement to register for CIS taxation is always best to ensure you are only taxed at 20% by HMRC. Not registering sees a tax rate of 30% to HMRC.
Each tax year, a subcontractor is required to submit a Self Assessment tax return. The tax collected out of each payment you receive is for Tax and National Insurance and a Self Assessment tax form is typically used to calculate the yearly taxation.
Because those performing work under the CIS model frequently overpay taxes due to the high tax rates, a tax refund is usually issued by HMRC for the overpayments. To make sure you get the best possible tax refund, a comprehensive assessment of your expenses should be regularly updated throughout the year.
For a contractor, you are considered as such if you spend 1 million pounds a year on construction within a three-year period. Since contractors and subcontractors can typically be one-in-the-same for most workers in the construction industry, having a CIS limited company is the best way to both control your business and reap the best benefits of the CIS system.
The process of keeping up with the CIS tax system is frequently criticised, which is certainly necessary due to the complex procedures required of both contractors and subcontractors alike. For example, there are different procedures required for both contractors and subcontractors who chose to go into business as a limited company.
How Do I Claim My CIS Tax Back as a Limited Company?
If you are operating as a CIS limited company, you will need to treat your CIS tax payments as a monthly submission to HMRC. Have a tax specialist keep track of all the CIS deductions you have paid to HMRC throughout the month and then submit a payment submission to HMRC reflecting the payments.
Since you have chosen to operate as a CIS limited company, you need to get a tax specialist to go over the protocols of operating as a limited company, which are very different from CIS procedures as a subcontractor. A tax specialist will make sure you get the best possible tax return for your company based on the protocols required by HMRC and the possible deductions and benefits you can get for operating as a limited company.
- Always register your company immediately with HMRC either by phone or online.
- Make sure your new company is set up with the PAYE scheme.
- Keep all of your payment and deductions statements from every contractor who pays you to ensure you are prepared when it comes time to file your CIS tax return.
- Get in touch with all of the contractors you have worked with to inform them that you have set up a limited company.
How Do I Claim Back CIS as a Subcontractor?
At the end of each tax year, you will need to get and fill out a Self Assessment tax return that lists all of your payments and expenses throughout the year. Since there are many pieces of information you will need, be sure to keep track of the following throughout the year:
- CIS vouchers or payslips. These statements are the official proof of the work you performed under the CIS system and the amount you earned and paid to HMRC.
- Worksite information. You will need to make sure you keep track of all the places you performed work and the names of any contractors who contracted your services.
- Keep track of your mileage. MOT certificates or other official records that show the mileage your vehicle accrued getting to and from work sites.
- Receipts for work-related expenses. Essentially, any expense that you have to pay for work-related items or services should be documented with a receipt of purchase for your tax return.
- Bank Statements. This may not always be required, but if there is ever any discrepancy, this will show proof of revenue.
What is the Process?
The process for getting your tax back can vary based on how accurate HMRC has been in keeping track of all the tax you paid. Since CIS requires the tax to be immediately withheld at the source, HMRC receives the tax shortly after, which is similar to how the process works under the PAYE system.
According to the government, when you’re registered with the Construction Industry Scheme, you’re still responsible for paying the correct tax and National Insurance for your business, even if deductions have been made by contractors throughout the year.
Contractors will give you a monthly statement of what they’ve paid you and the deductions they’ve made to help with your accounting. So, the system is very time-consuming and a bit exhausting to keep track of.
Keeping track of all your statements, expenses, and possible deductions is crucial to get the tax refund you deserve for CIS tax.
How Long Does It Take to Get a Tax Refund from CIS?
First, you need to make sure you have kept track of all the proper proof and documentation to ensure that a refund is required for the overpayment of taxes. Inputting all of the required information into a form SA100 is going to take a lot of time due to the many deductions and expenses that need to be reconciled.
It typically takes HMRC two weeks to process CIS tax returns. This is due to additional security checks that may need to be performed to ensure all of the proper procedures have taken place in accordance with CIS guidelines.
However, if all of the proper information is contained on the tax return, a tax specialist can typically have a CIS return filed within 24-48 hours. The length of time for getting your refund can vary based mostly on the time of year you submit your CIS tax return, but generally your rebate can be obtained within two weeks.
Are you registered under the Construction Industry Scheme?
VW Taxation specialises in tax returns for self-employed construction workers registered under the HMRC Construction Industry Scheme (CIS). We’ve been managing tax procedures and providing accountancy services for self-employed tradesmen since 2009, and work with all ranges of construction workers from builders and carpenters, to plasterers and electricians.
Through our extensive experience and as registered agents of HM Revenue and Customs, we offer an expert tax and accountancy service.
How we can help you with your CIS tax return?
- Submitting your annual tax return
- Expenses – advise you on what you can and can’t claim tax relief on
- Ensure you have the correct paperwork for each tax return
- Claiming back any overpaid tax
- Submitting up to 4 years tax returns
On average, we claim our clients an average tax rebate of £2500. As well as claiming tax rebates for our customers, we also work with them and the HMRC to minimise any fines if tax returns are not submitted on time. Just recently, for one of our clients we appealed fines totalling £3358, got them written off, and then successfully claimed £9681 in rebates.
Talk to VW Taxation
So, to say that the process is long-winded and complicated would be an understatement. The CIS system ensures that HMRC is adequately paid, yet the workers are saddled with overcomplicated tax guidelines that shouldn’t be anywhere near this complicated.
For all intents and purposes, the best method is certainly to hire a taxation specialist to oversee the CIS process throughout the year. This will allow you the time and energy to focus on your career without all of the confusion that comes with keeping track of so many required documents for the CIS tax system.
A tax specialist will take the information you give and keep a comprehensive file that lists the full details of the payments and the deductions you qualify for. A tax specialist can keep track of all of this information and even offer guidance and advice on the CIS tax process throughout the year.
Let the taxation specialists at VW Taxation assume this tax burden for you. We strive to provide 100% client satisfaction every step of the way. Taxes are already complicated as it is, and when you add CIS taxation to an already complicated process, the entire procedure can be enough to induce a headache or two.
Why Use VW Taxation for Your CIS Tax Return?
Here at VW Taxation, we prioritise efficiency and courtesy to all of our clients navigating the confusing waters of CIS tax returns and payment procedures. Additionally, we can help you transition to the much more efficient and lucrative process of becoming a CIS limited company to maximise the absolute best of the time and energy you put into your career.
Here are just some of the services we offer:
- We specialise in Tax Return procedures and Accountancy for the self-employed
- We have extensive experience in managing the tax return process for Construction Industry Scheme Registered Individuals
- We claim on average tax rebates of £2500 for our CIS clients
- We offer our customers a generous Referral Scheme for anyone they recommend
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If you are in need of help with your CIS tax return, please contact us to allow our specialists to guide you through every step of the process with ease and understanding.
