Are you due a CIS Refund?

Are you due a CIS Refund?

Unless you hold gross payment status, the Contractors for whom you work will have deducted 20% (30% in some cases) from payments to you. As the 2018/19 tax year has now passed, it is time to prepare and submit a tax return to HMRC.

In most cases this is likely to result in a tax refund for the following reasons:

Personal Allowance – the first £11,850 that you earned in this year was tax-free but you will have had 20% or 30% deducted from all earnings.

Tools, Material & Protective Clothing – anything acquired for the purpose of your trade will qualify as a deductible expense for Income Tax purposes.

Mileage – if you use your own vehicle to travel to site, you are entitled to claim this as a deductible expense against your income at a rate of £0.45 per mile for the first 10,000 miles and £0.25 per mile thereafter.

Insurance – any business insurance that you are required to have is a deductible expense for Income Tax purposes.

Use of Home – if you use your home for work purposes for 25 to 50 hours per month, you are allowed to claim a deductible expense of £10 per month.

Telephone – if you use your phone for work purposes, you will be entitled to claim a proportion of your monthly phone bill as a deductible expense.

Buying a Van – if you acquire a van for the purposes of your trade, this is likely to qualify for Annual Investment Allowance (AIA) meaning that the total cost of the van is deducted from the trading profit. If deciding to acquire a van, we would recommend seeking advice from your accountant to ensure that it is an AIA qualifying vehicle.

In order to establish if you are due a refund we would recommend that you gather details of your income and expenditure for the 2018/19 year and provide it to your accountant as soon as possible. Where you are unsure as to whether an item of expenditure is a qualifying expense, keep your receipts so that your accountant can review.

Should you require any assistance with completion of your return and submission to HMRC, contact a member of our accounts team on 028 8772 4697.