Construction Industry Scheme (CIS) – Getting Your Tax Back

If you are self-employed as a subcontractor within the construction industry, your contractors will deduct tax from you when making payment (20% or 30%), unless you have ‘Gross’ status enabling you to be paid in full. This tax is then reclaimed through your tax return.

However, if you have a limited company, this CIS tax can only be recovered through a PAYE scheme. It will be offset against PAYE, National Insurance and any CIS tax that you have deducted from subcontractors that you pay. If this results in excess monies being deducted from the company, the company can request that this overpaid tax be offset against other taxes owed, such as Corporation Tax. But, you must have a PAYE scheme in place to recover this, even if you don’t pay any wages. It is also important to note that the excess monies deducted don’t automatically flow into the next tax year, the company must notify HM Revenue & Customs of it’s request to do so.

Please contact the Small Business Team to discuss any of the issues above or any CIS queries you may have.