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Your Questions Answered – Everything you need to know about CIS Tax

08/04/2020

If you’re a new worker employed under CIS, or you’ve been in the building trade a while, but only now making the move from PAYE to CIS, you may have a few unanswered questions regarding the process.

Here we’ve answered a list of questions you may ask yourself during the process of applying for CIS.

What is CIS and what does it stand for?

CIS stands for Construction Industry Scheme. It is an initiative which was enforced by HMRC in 1971 to protect construction workers from false employment and minimise tax evasion in the construction industry.

Who does CIS apply to?

The Construction Industry Scheme surrounds payments made by a contractor to a subcontractor.

The regime applies to all payments made under a construction contract, a contract relating to construction operations that is not an employment contract.

CIS then covers where one party is a contractor and the other party is a subcontractor.

What is the CIS deduction?

The deduction is HMRC’s way of collecting income tax from people who work in and around the building industry as subcontractors rather than employees.

If you’re registered for the scheme, 20% tax will be deducted from your salary.

If you’re not registered, then the deduction is 30%, so it definitely pays to be CIS tax registered.

What work is covered by CIS?

The scheme covers most construction work, this includes, decoration, site preparation, repairs, demolition, and other related work. Both those making payments and those receiving payments will need to register for the Construction Industry Scheme.

However, certain construction work is exempt from CIS. This includes, architecture and surveying, scaffolding hire, carpet fitting, delivering materials and work on construction site that is clearly not construction, for example running a canteen or site facilities.

How can I claim back tax if I am taxed under CIS?

Here at ClaimBackTax, if you’re due a tax rebate, we want to help you maximise your refund.

To make the CIS tax refund process as simple as possible, try to keep records of things you have paid out for, if not, we will work with you to compile your yearly income to maximise your expenses and apply any other allowances that you may be entitled to ensure that we maximise your refund at every opportunity.

To get your claim started, contact us at info@claimback.tax or call us at 01925939822.