Subcontractors registered in the construction industry scheme (CIS) will normally have tax deducted from their invoices by the companies they work for. At the end of the tax year that CIS tax needs to be tallied up and set against the subcontractor’s own tax liability. In most years once business expenses are taken into account the subcontractor will be due a tax repayment.

If you are a sole trader the quickest way to receive this tax repayment is to submit your personal tax return for 2019-20. We can help you with that. HMRC have promised to speed up the processing of tax repayments this year as many construction workers have been unable to work since March.

If you trade through your own limited company the CIS tax deducted from your invoices is first set against the PAYE and NIC the company owes to HMRC. Any CIS tax not off-set in this way can be reclaimed from HMRC either online or by post. Using the online method means you will receive the tax refund more quickly. You can ask for the tax repayment to be set against other tax your company owes such as corporation tax or VAT.

Do not delay paying tax because you believe there is a CIS tax refund due to you or your company. In normal times paying your VAT late will create a default surcharge which is imposed at a higher percentage each time your VAT payment or VAT return is late. Currently the VAT due on returns for periods ending in February, March or April 2020 is automatically deferred to 2021 but you will have to pay that VAT eventually, so put aside what you can to pay the VAT when it falls due.

Last updated: April 29th 2021.