How to complete a CIS self-assessment Tax Return

CIS tax returns are important to understand whether or not you intend to hire an accountant to do the work for you or whether you decide to undertake it yourself. If you work in construction, it's almost certain that at one point or another you've heard about the Construction Industry Scheme. CIS, as it's known more commonly, is essentially a scheme for self-employed and contractors in construction that prevents tax evasion and fraud.  

These self-assessment tax returns need to be completed by October following the end of the tax year, this deadline includes only the physical paper self-assessment tax returns. For the online digital tax returns, the deadline is extended until the end of the following January.  

Under this scheme, which all contractors are required to sign up to, contractors have to submit an amount of money deducted from subcontractors to pay to HM Revenue and Customs. This counts towards tax for the subcontractors who are also encouraged to sign up for the scheme as the amount reduced of their payments decreases if they are. 

If you miss this deadline there is of course consequences which depend entirely on how late you are in filing your tax returns. These penalties can start pretty low at only £100 but increase quickly with consideration to how late your tax returns are. The best idea is to get these returns in on time and if that isn't possible, hiring a CIS accountant who can file them for you is always an option to ensure you incur no fines.  

Included in these tax returns is information relating to you and your business (if applicable) as well as a number of financial declarations and information regarding any subcontractors you may have hired. 

Normally, sub-contractors will overpay under this tax scheme and will almost certainly be able to claim back a CIS tax refund when submitting their tax returns for the financial year. Similarly, any contractors who include expenses made in regards to their business can of course claim tax refunds on these things. This ranges from materials used when building to the cost of running vehicles and machines on a site. Sub-contractors can also claim more tax refunds in a similar way, assuming that any expenses were for business purposes, they can claim refunds just the same. 

If this isn't something you as a contractor are aware of or if it's not something you want to have to worry about whilst working or running your business, there are of course options other than submitting a CIS tax return by yourself. 

In order to submit your self-assessment tax return, you'll need the 10-digit number given to you when signing up for the scheme, details of the previous year's income, interest earned from bank accounts (for example, although there are of course other places you could garner interest from), any losses to money below £50,000 and finally, if you are a subcontractor, any money deducted by contractors which was paid into the scheme. 

As it stands, there are a lot of CIS accountants ready and willing to take on such work. These accountants can do all of the work for you or your business, including advising on the status of a subcontractor, as oftentimes they can be considered both a subcontractor and an employee. They can also check with HMRC to verify their employment status and ensure you as a business don't incur any fines from improper communication, and as well as this, can ensure all of your books are in order so that when submitting the tax return on your behalf, you will have no surprise fees or fines. Certain accounting firms can also provide a payroll software or service that is in compliance with CIS rules, this can be helpful if you want to ensure all of your taxes are in order at the end of the year.