CIS Calculator for Subcontractor’s Tax Deductions and Rebate 

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Written by: Liez Comendador
CIS Calculator

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How much taxes a subcontractor pays depends on whether they are CIS and/or VAT registered. Our CIS calculator for tax deductions and rebates will prove essential in the calculation process. Rebates, most especially, should not be ignored, as they can reach around £2,000 for an average subcontractor 

A Brief Guide to CIS Tax  

Construction workers are automatically under the CIS taxation system, which is HMRC’s initiative to ensure tax is paid promptly and accurately in the construction sector. A CIS-registered taxpayer will get only a 20 per cent deduction in their invoice, whilst the non-registered 30 per cent.  

Contractors are obliged to calculate and deduct their subcontractors’ CIS tax and National Insurance from their invoices, which will count as an advanced payment to HMRC. 

The calculation will depend on their statuses. If the subcontractor registered for both CIS and value added tax (VAT), the contractor will exclude the VAT from the total gross amount. If not VAT registered, the full VAT cost is included and will be charged to the contractor according to the domestic reverse charge VAT rule.  

CIS Calculator for Subcontractor’s Tax Deductions and Rebate 

CIS Deduction Calculator 

Contractors first work out their subcontractors’ gross amount (excluding VAT rate if they are registered), subtract the qualifying materials, and then work out the CIS taxes to deduct based on the result.  

CIS tax calculator results online are only for illustrative purposes and do not replace tax experts’ advice. National insurance rates and employee paycheck change every year; hence, reaching out to tax accountants is the best way to guarantee accurate calculations.  

Our tax professionals use tax deduction calculator UK to obtain a rough estimate of how much tax a subcontractor will pay and how much they are left with for take-home pay. Final tax calculation is only arrived at after every aspect is considered. 

CIS Rebate Calculator 

Since CIS workers are not under PAYE, which means they do not receive tax codes, making overpayments way beyond what they owe is prevalent. Some construction workers can be refunded thousands of pounds depending on their earnings and expenses. This is why subcontractors should not miss out on getting potential rebates, which they can claim through self assessment tax returns.   

Claimable business expenses for rebate must be wholly and exclusively used for business purposes. In many cases, there is no need for receipts to claim CIS rebates. Our experts at Legend Financial can calculate the right amount, assist with filing self assessments, and ultimately help subcontractors maximise their rebate claims as much as possible.  

Frequently Asked Questions

A CIS payment and deduction statement must include the contractor’s and subcontractor’s information, subcontractor’s UTR, gross pay, qualifying business materials, and CIS tax deductions, etc.

Under CIS, contractors deduct from subcontractors’ invoices and pay the taxes on their behalf.  

Whilst qualifying materials do not incur CIS tax, not all construction materials are considered allowable expenses, such as vehicle purchases. 

How Legend Financial Can Help

Tax regulations and subcontractors’ salaries may change at anytime, so the above CIS calculator results may not substitute professional advice. Our tax accountants at Legend Financial are available for CIS payroll outsourcing, on-site or online 

Over the years, we have helped a lot of construction workers become fully compliant with their CIS obligations and other tax affairs. From helping you with filing self assessments to claiming back deductions, our professionals will aid you every step of the way. Talk to one of our tax experts today! 

Author

  • Junaid Usman

    Apart from being a partner at Legend Financial, Junaid is an expert on Business Tax including business management advisory services which has proven in the growth of company. He is a promising advisor with an ideology; "Any business success depends on the level of objectivity it maintains."

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Picture of Junaid Usman
Junaid Usman
Apart from being a partner at Legend Financial, Junaid is an expert on Business Tax including business management advisory services which has proven in the growth of company. He is a promising advisor with an ideology; "Any business success depends on the level of objectivity it maintains."

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