How Can You Maximize the CIS Tax Rebate This Finacial Year?

As per the construction industry scheme, your tax is deducted from your pay in advance. However, if you are eligible, you can claim the amount you have overpaid as tax. You can do so at the end of the financial year in April. Your claim will consider personal allowance which is the first £12,570 of your pay.

HMRC provides you with the opportunity to make a claim for tax relief for anything you have purchased to use entirely and exclusively for your business throughout the financial year. Work-related expenses are tax deductible which is not the same as getting a refund. You can claim a tax deduction in case of most work expenses.

If you are making more than £12,570 then you can utilise your expenses to set off the amount of tax that you have paid through the CIS and maximize your CIS tax rebate. When you claim more legitimate expenses, your rebate will get higher. Make sure to keep the receipts and records of all your expenses. With this, you will easily be able to calculate the amount you are eligible for. Moreover, your expenses shouldn’t amount to more than about 10% of your income for the given year.

So what can you actually claim as a business expense?

As you can understand, dry cleaning and groceries cannot be included in HMRC’s list of allowable expenses. According to the rules, your expenses should be necessary and entirely incurred for running your business. Below we have listed some of the things that you might use entirely for work and claim a CIS tax rebate on them if you have paid for them.

Products

This includes tangible items such as protective attire, safety helmets, reflective vests or uniform, tools and safety equipment, and cleaning supplies.

Stock

Products and items that you buy with the intent to resell and raw materials that you buy to use for producing items are known as stock.

Subscriptions

It includes things such as bank charges, trade association memberships, accountancy fees, and builders’ liability insurance.

Transport

If you are paying for train tickets, bus fares, or even driving miles in your own vehicle, you can get a fast CIS rebate at end of the financial year. Experts recommend keeping a travel log to note the dates as well as locations you have traveled to and from. If you have traveled to at least two locations throughout the financial year, you can claim for the mileage.

Subsistence

You can claim subsistence only when you travel outside of the regular commute to work and have to stay overnight. In such case, you can claim accommodation and food that you bought while staying out for work.

Bottom line

Keeping all the records and receipts of your tax-deductible expenses can make the process of claiming a CIS tax rebate much easier. We hope that the above post has provided you with some helpful insights about the CIS tax rebate. If you still find yourself stuck somewhere, don’t hesitate to get in touch with the experts right away.

0