A CIS self assessment tax return is a form that self-employed individuals in the construction industry need to fill out and submit to HMRC at the end of each tax year. The form is used to report the total amount of money earned and expenses incurred during the year. It is important to complete and fill out the CIS tax return correctly to ensure that you are paying the correct amount of tax and avoiding any potential penalties or fines. Failing to do so may result in an investigation by HMRC, which can be both time-consuming and costly.
Check out our CIS Tax Return service here.
What is the construction industry scheme (CIS)?
The Construction Industry Scheme (CIS for short), is a set of regulations that apply to contractors and subcontractors to ensure that people working in construction pay the correct amount of tax and National Insurance.
Under the CIS, contractors are required to register with HMRC and verify the employment status of any subcontractors they use. Subcontractors also need to register with the scheme and provide their Unique Taxpayer Reference – also known as a UTR number – to any contractor they work for.
It is then the responsibility of the contractor to deduct tax and National Insurance contributions from the payments they make to their subcontractors and pay these amounts directly to HMRC.
What is a CIS tax return?
Those working through the Construction Industry Scheme need to complete a CIS self-assessment tax return after the first year of trading and subsequent years after that. This tax return is used to report income and expenses related to construction work and to calculate the amount of tax that is owed to HMRC.
A CIS self assessment requires contractors to deduct a percentage of payments made to subcontractors for construction work and to pay it directly to HMRC, which is then offset against the subcontractor’s tax bill.
When does a CIS self assessment tax return have to be filled by?
The deadline for completing and submitting a CIS tax return is January 31st following the end of the tax year, which runs from April 6th to April 5th.
If you are paying subcontractors, you must tell HMRC monthly about the payments you have made. This needs to be done on the 19th of every month following the last tax month – for example if you’re making a return for the last tax month of 6th May to 5th June, it must be with HMRC by 19th June.
On your return, you must declare that the subcontractors listed are not employees. You could get a penalty of up to £3,000 if you give the wrong employment status for a subcontractor on your monthly return.
What do I need to include in a CIS self assessment tax return?
- Your total income from construction work in the tax year, including any deductions made by contractors under the CIS.
- The deductions made from your payments by contractors under the CIS.
- Any other income you received during the tax year, such as rental income or interest on savings.
- Your business expenses, including any costs related to construction work, such as tools, equipment, and materials.
- Any losses you have incurred during the tax year that an be offset against your profits.
- Any tax you have already paid through the CIS or other means.
- Your National Insurance contributions.
- Details of any employees you have, including their names and National Insurance numbers.
- Any payments you have made to subcontractors under the CIS.
- Your Unique Taxpayer Reference (UTR) number.
Remember to keep all relevant receipts and records to support your tax return, in case HMRC needs to check them. If you are unsure about any aspect of your tax return, it’s best to seek professional advice from an accountant or tax specialist.
Download our guide ‘What’s reported in a self assessment tax return.’
Are there any penalties for not completing a CIS tax return on time?
These are the penalties for not completing your CIS self assessment tax return on time:
| How late the return is | Penalty |
| 1 day late | £100 |
| 2 months late | £200 |
| 6 months late | £300 or 5% of the CIS deductions on the return, whichever is higher |
| 12 months late | £300 or 5% of the CIS deductions on the return, whichever is higher |
Do I reclaim business expenses as part of a CIS tax return?
As part of the Construction Industry Scheme, you will be able to claim tax back on expenses incurred as part of your work, such as materials, tools, or travel expenses. You cannot claim for items that are for personal use, or high ticket items that are classed by HMRC as capital.
What you need to do before completing your CIS tax return
Before beginning or submitting a Construction Industry Scheme (CIS) tax return, there are a few important steps to take to ensure accuracy and compliance with HM Revenue & Customs (HMRC) regulations.
By following these steps, you’ll be well-prepared for completing your CIS self assessment. If you’re unsure about any aspect of the process, it’s always best to seek professional advice.
- Gather your paperwork – You’ll need to have all relevant documents, such as your invoices, receipts, and bank statements, to hand.
- Check your deductions – Make sure you’ve deducted all eligible expenses from your income, such as materials, equipment, and travel costs.
- Verify your subcontractors – Check that the subcontractors you’ve paid are registered with the CIS and that you’ve deducted the correct amount of tax from their payments.
- Calculate your CIS deductions – You’ll need to work out how much tax you’ve deducted from your subcontractors’ payments and make sure it matches the amount you’ve paid to HMRC.
- Review your figures – Double-check all your calculations and make sure you’ve filled in all sections of the tax return correctly.
- Submit your return on time – The deadline for submitting a paper tax return is 31st October, while online returns must be filed by 31 January.
How to submit a CIS tax return?
CIS Tax returns can be submitted online using the HMRC website. Alternatively, you can sit back and let us do all the work for you…
Hire an accountant to do your CIS tax return
CIS tax returns can be complicated and time-consuming. With payment deductions, declaring incoming, listing business expenses, and paying subcontractors – there is a lot of information to include to make sure they’re accurate and that you’re getting the deductions that you’re eligible for.
This is where hiring an accountant can make a significant difference. An accountant will help ensure that your CIS tax returns are completed accurately and on time. This can help you avoid penalties that might arise due to incorrect or late submission.
Why choose CloudAccountant.co.uk
Our CIS Tax Return service is custom-built to take the stress, complexity, and guesswork out of preparing and filing your tax returns.
For a single fixed fee, we can handle every stage of the process, from getting you registered for the system to submitting your returns online. Because we can become your “official agent” with HMRC, you’ll never have to deal with the taxman yourself. With CloudAccountant.co.uk, you’ll never miss a deadline or any tax relief you’re entitled to.
Get in touch!
Need more information about your CIS Tax Returns? If you’d like some free, impartial advice on how we can help submit your returns accurately and on time, you can contact us by emailing info@cloudaccountant.co.uk, calling us on 01625 546 232, or simply fill in the enquiry form on our website.