tax2u Constructor

Why does my client take CIS tax from me?

tax2u Constructor

Under HMRC’s Construction Industry Scheme (CIS) the Contractor has the responsibility to deduct 20% or 30% (depending on if you have a UTR or not) from the Subcontractors pay (normally an individual) – this is to ensure that they pay their Income Tax to HMRC every year.

The tax that the Contractor deducts from the individual through CIS is sent to the HMRC each month, as it would under PAYE. HMRC then allocates this as Income Tax to the individuals tax account.

At the end of the tax year on 5th April, HMRC will hold all the tax collected for the individual or Subcontractor. It is then the individuals responsibility to submit a Self-Assessment tax return to HMRC to confirm as follows:

  • Total income (CIS, PAYE, Shares, Rental, other profits)
  • Total business receipts (Expenses)
  • Calculate their profit
  • Calculate outstanding tax to be paid or reimbursed

HMRC will then advise if the tax collected throughout the year is more, or less than the final tax bill.

If the tax collected is more than what is due, then the individual (you) would be due a tax rebate.

Tax2u has simplified this process and has helped thousands of clients reclaim their overpaid tax.

All we need is for you to upload your payslips and supporting documents onto our secure Online Dashboard. To get started click here to open your free Tax2u Online Dashboard, start uploading your files and be allocated your dedicated Accountant.

The best bit is that we will draft your return for free to find out if you are due tax back or not.

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CIS stands for Construction Industry Scheme, it’s a tax legislation put in place by HMRC to ensure all construction workers pay their tax. Read more

Some Your client or contractor has to deduct CIS tax from your pay each and every time they pay you. They then pay this tax deduction to HMRC who hold it on your account until your submit your tax return. Read more

Everyone in the UK gets a tax free allowance, this is the threshold before you have to pay any tax. However, as your client has already deducted your tax from earnings under the threshold you can claim it back. Read more

If you have earning over the minimum threshold (£12,570 for tax year 2023-24) then you can maximise your tax rebate by offsetting your income with business receipts. Read more

The main thing that you need is your CIS deduction certificates, payslips or your bank statements to prove income and tax deducted. Read more

You can claim back your CIS tax on the 6th April each year for the previous tax year. You then have until the 31st Jan (the tax return deadline) to submit your tax return. Read more

To claim back your tax you need to submit your self-assessment tax return. Read more

A CIS deduction certificate is the payslip that your client should give you each and every time you are paid. It will show the Gross, Nett and Tax deducted amounts that tax2u will need to reclaim your tax. Read more

It really couldn’t be simpler, log in or create your free account, upload your CIS deduction certificates / payslips and our accountants will do the rest. Read more