9th May 2018 Posted by - Alexander Accountancy
The majority of subcontractors working in the construction industry are due a tax refund.
The over payment of tax is created by the Construction Industry Scheme (CIS) tax. This is a method of collecting tax from subcontractors working in the building trade. This deduction is an advanced tax payment for the subcontractor that is paid directly to Her Majesty’s Revenue & Customs (HMRC) by the main contractor. The normal CIS tax rate is 20% and is only applied to the labour element.
By law, every subcontractor is required to submit an annual Self-Assessment Tax Return. The period for this runs from 6th April to the following 5th April and must include all income, expenditure and tax already deducted. The average overpayment of tax is approximately £2,000 and can only be reclaimed once the Tax Return is filed. Many people leave filing their tax return to the last minute and submit it during January, receiving the refund 9 months after the period end.
Alexander Accountancy have been proactively encouraging our clients to provide their records as early as possible, and for those that have responded HMRC are now issuing the refunds.
How would you spend your refund?
If you would like more information on how Alexander Accountancy can help, please call us now on 01283 743851 or email via email@example.com to book a free, no obligation consultation.