Tag Archives: Construction Industry Scheme (CIS)

Taxing time for UK taxpayers

Taxing times for UK taxpayers

Taxing times for UK taxpayers are upon us because of Coronavirus.

Canalitix Accountants have created a set of income tax calculators and schedules to aid tax payers with their income tax planning.

The income tax calculators will focus on the construction industry and buy to let (BTL) property investors.

Prior to COVID-19, BTL property investors were already suffering from the phased withdrawal of mortgage interest tax relief.

Property and construction are directly connected industries and construction workers have taken a hammering (no pun intended) during COVID-19.

HMRC will withdraw the final 25% of allowable residential finance costs from 6th April 2021. However, don’t rush to liquidate your BTL portfolio or convert to a limited company just yet.

You may be losing 25% of your mortgage costs but you will still get a basic rate tax allowance to compensate. It may only be 20% but it’s better than a slap in the face with a wet fish.

Why pay all that money to an accountant when you can find the information in books and on the internet?

HERE is why, the accountant knows exactly which page to find it. Enjoy!

NOTE:
The tax calculators are provided for research purposes only and are not meant to be relied upon for any other purpose.

CIS Tax Rebate Calculator
Income Tax Calculator
Capital Gains Tax Calculator 2019-20
Capital Gains Tax Calculator 2020-21

If you would to use our tax filing services please submit your email address along with a brief description of your requirements and we will get back to you.

This post on Taxing times for UK taxpayers was sponsored by Canalitix.com

Thank you for your interest.

Construction Industry Scheme (CIS) Tax Rebate

Construction Industry Scheme (CIS) tax rebates are available to subcontractors.

HMRC requires contractors to register for CIS and to verify subcontractors to determine the correct CIS deduction rates. CIS deductions are treated as advanced payments of Income Tax and National Insurance.

CIS Deduction Rates

Subcontractors registered with HMRC pay the standard 20% deductions, as opposed to the higher rate of 30% for unregistered subcontractors. In addition, some subcontractors are approved for gross payments where they have a history of filing and paying taxes on time.

CIS Tax Rebate

Subcontractors can apply for CIS rebates on their Self-Assessment tax returns. HMRC will refund any overpaid tax where the CIS deductions were greater than the actual tax liability for the tax year ended 5th April.

On average, we recover tax repayments of £1,500 per CIS subcontractor and our fees are only payable when the funds are recovered from HMRC.

NOTE:
The tax calculator above is provided for research purposes only and is not meant to be relied upon for any other purpose. If you would to use our tax filing services please submit your email address along with a brief description of your requirements and we will get back to you.

You may be interested in other tax calculators from CANALITIX ACCOUNTANTS below:
Income Tax Calculator

This post on Construction Industry Scheme (CIS) Tax Rebate was sponsored by Canalitix.com

Thank you for your interest.

COVID-19: Construction industry furlough claims rejected

COVID-19: Construction industry furlough claims rejected as ineligible.

Why are claims by construction companies for furloughed staff being rejected as ineligible?

One of the qualifying criteria for claiming 80% of the salaries of furloughed employee under the Coronavirus Job Retention Scheme (CJRS) is that the employer must have operated a PAYE scheme prior to the 19th March 2020.

PAYE/Construction Industry Scheme (CIS) Anomaly

HMRC operates two PAYE schemes for construction companies: Subcontractor Only and the hybrid Subcontractor/PAYE scheme.

Subcontractor Only PAYE Scheme – Ineligible for CJRS Grant

Construction companies which fall under the Subcontractor Only category are automatically rejected as ineligible when applying for the CJRS grant. This is despite the fact that these companies have been running employee payrolls for several years.

Construction industry furlough claims rejected

Subcontractor Only / PAYE Scheme – Eligible for CJRS Grant

All is not lost. Construction companies that have been rejected as ineligible for the CJRS grant can contact HMRC’s Employer Helpline on 0300 200 3200 and request that their PAYE scheme be modified to the hybrid version: Subcontract Only / PAYE.

Once HMRC has updated their system, the construction companies affected can re-apply for the grant after 72 hours.

Hector has his limitations

Despite the multiple qualifying criteria listed by the government for making a CJRS claim, Hector has decided to keep things Plain Vanilla for the construction industry by limiting his checks to whether the company’s PAYE scheme is Subcontractor Only or not.

Hector has no time for Tutti Frutti logic like IF PAYE Scheme equals Subcontractor Only and Company runs Payroll then Eligibility is TRUE.

To be fair, Hector is only a tax inspector and not an IT programmer.

This post on The COVID-19: Construction industry furlough claims rejected as ineligible was sponsored by Canalitix.com

Thank you for your interest.