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Could you be overpaying on CIS?

April 2021

If you work for a contractor in the construction industry as a self-employed individual, under the CIS, the contractor is obliged to withhold tax on its payments to you.

Construction Industry Scheme (CIS) - Tax Advice

Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HMRC.

Registered CIS workers receive their payments net of 20% tax. If a subcontractor is unregistered, they will receive their payment net of 30% tax. Expenses wholly and exclusively used for your business can be set against your income and as a consequence many people under CIS overpay tax and need to claim a refund.

This is different from other self-employed individuals, who normally receive their payments gross.

The construction Industry Scheme covers more than you might expect in terms of building and civil engineering work. This includes repairs and decorating, demolition, site clearing, and installing power systems.

For the purpose of CIS, construction work includes:

Due to the tax implications of this scheme, many employees in the construction industry are overpaying and may be entitled to a tax refund. This is where we can help.

Services we provide for subcontractors:

Many accountants will charge a fee as a percentage of your refund, but here at Aston Shaw, we charge a fixed fee in completing your Self Assessment Tax Return and claiming any refund due.

For any enquiries relating to the Construction Industry Scheme or to find out more, please contact us and one of our friendly specialists will be in touch.

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