Understanding Your CIS Tax Rebate

For many people that work in the construction industry and are self-employed, working out a tax assessment can be stressful. It can be easy to be confused by a self-assessment tax return, and if you have had money taken as part of the Construction Industry Scheme (CIS), then there is every chance that you could be entitled to a CIS tax rebate. 

What Is A CIS Tax Rebate?

The Construction Industry Scheme (CIS) sees money deducted from subcontractor payments so that they can be passed onto HMRC. These are considered to be advance payments toward tax and National Insurance for the contractor.

You have to be registered with the CIS scheme for this rebate to apply and deductions are usually around 20%. However, these can range up to 30% – known as the higher rate. 

Individuals can be due a tax refund when they have paid too much through the year. 

What Information Do I Need?

To be able to complete your tax return, you need to have your Unique Tax Reference with you. It’s not a number that is shared, it’s unique to you and it’s how HMRC knows you are self-employed. The other paperwork you must include is:

Income Form

This includes your annual turnover and is calculated in your sales. Any additional income also must be included.

Losses Form

There are certain circumstances where you may be able to apply for losses on your income in the financial year. This is limited to £50,000 or 25% of your total income.

Interest Earned

This isn’t just your money, but interest gained on your bank accounts, too.

Contractor Payment Deductions

If you are a subcontractor, you should include all deductions made by contractors in the financial year.

Business Expenses

HMRC need to know about any business expenses you have. These can include but aren’t limited to travel, tools, protective equipment, accommodation – anything you would typically include as a business expense. 

About CIS Mortgage Advice

At CIS Mortgage Advice, we specialise in helping CIS contractors find the right mortgage, where they might otherwise be refused by a mainstream lender.  

Contact us today and one of our mortgage advisers can give you an initial Fee Free, no-obligation telephone assessment. 

During this initial call, we will calculate how you may borrow based on your CIS day-rate before tax, instead of using an average of your last two year’s self-employed income which most banks will ask for. 

Subject to providing us with evidence of your income and identification we can even obtain an instant provisional lending agreement.

If you’ve only been a subcontractor, or self-employed, for less than a year, then our mortgage advisers can even help you get a mortgage without having to complete 2 or 3 years of accounts.

Give us just five minutes of your time, and we can advise you how much you may be able to borrow on a CIS mortgage.