If you are a construction subcontractor working in Bolton, chances are you are looking for ways to save on taxes. One way to save tax is to partner with experienced accountants in Bolton. This article provides an overview of the benefits of working with accountants in Bolton and outlines how you can claim your CIS tax refund. Additionally, we provide tips for finding the right accountants in Bolton and advice on avoiding common tax-related mistakes. With the help of professionals, you can maximize your tax savings and make sure you comply with HMRC regulations. So, read on to learn more about how to get the most out of your tax returns.
Overview of the Construction Industry Scheme (CIS)
The Construction Industry Scheme (CIS) is a government-run scheme that provides construction subcontractors with a tax refund. Under the scheme, contractors who have to pay taxes on a monthly basis can claim a refund from HMRC. The refund is based on the amount of tax paid by the subcontractor during the tax year.
In order to qualify for the CIS tax refund, subcontractors must meet certain criteria. These include:
- Being registered with HMRC as a construction subcontractor.
- Having all the required documents for proof of identity and business.
- Providing evidence of income from work done under the CIS scheme.
- Submitting the correct tax returns on time.
- Making sure that all the information is accurate and up to date.
With the help of experienced accountants in Bolton, you can make sure that you are complying with all the requirements of the scheme and claiming your CIS tax refund.
How can you register for CIS?
It is not mandatory for subcontractors to register in the CIS system, but they could be subjected to increased withholding if they do not. Therefore, it is sensible to register. Get ready your National Insurance Number, your enterprise’s one of a kind taxpayer reference number, VAT enrolment number if you are VAT enlisted, and your legitimate business name or exchanging name, if they are unique. If you are both a subcontractor and a contractor, registering for CIS for both positions is obligatory. Signing up is likewise pertinent to sole merchants and abroad based subcontractors that do construction work in the UK.
Do you aim to register your business as a limited company or partnership? You still have to register as a sole trader, after which HMRC will independently register the partnership. There are times when a subcontractor receives full payment without deductions due to their gross payment status. When you register for CIS, you can apply for the same status if you meet HMRC’s requirements, such as having a valid tax record.
How do you offset expenses against your tax?
To get a larger tax refund, you can subtract certain outlays from your self-employed income. This will reduce any taxes owed and boost the amount of your refund. Some of the expenses allowed for this purpose are car costs, office expenses, machinery, apparel, insurance premiums, and accounting fees. Generally, any work-related expenditure that has not been declared before the tax deduction can be taken into account. Be sure to maintain accurate records and invoices for all expenses that may be deducted.
What records do you need to keep to Claim a CIS Tax Refund?
It is essential to keep evidence of all your outlays and each claim you make for your PAYE or monthly bill every three months. You can maintain your own records or make use of the CIS132 form accessible on GOV.UK. Make sure to retain a copy of your bank statement or download an electronic bank statement if you have an online banking account. It is also advisable to pay for expenses and tools using either a debit or credit card to ensure you have a record of every purchase even if you misplace the receipts.
How do you claim your CIS tax refund?
The way you apply for a CIS tax refund is determined by whether you’re registered in the CIS system as a sole trader/partner or a limited company. For sole traders/partners, a Self Assessment tax return must be submitted to HMRC that specifies the full amount of the invoice income. In the ‘CIS deductions’ field, any deductions made by the contractor should be mentioned. The tax agency will then calculate the tax and National Insurance due, subtracting any deductions made by the contractor. If a CIS tax refund is owed to you, HMRC will make the repayment. On the other hand, any taxes owed must be paid by the 31st of January.
For limited company- If you have gross payment status, declare all your income in your Corporation Tax return as usual.
If your business makes CIS deductions, it must reclaim these funds through its monthly payroll system. Avoid attempting to reclaim the money through your Corporation Tax return, or else you may be punished.
Engaging YRF Accountants to claim your CIS Tax Refund
Here at YRF accountants in Bolton can be a great way to make sure that you are taking full advantage of all the tax benefits available to you. At YRF Accountants we have a dedicated team who are ready to assist and answer your questions about CIS tax returns and refunds.
Get in touch today to claim your CIS refund