If you are a Sub contractor, whatever your trade, you will need to complete a tax return so that you can declare your earnings to HMRC. Some people end up paying more tax than necessary, either because they haven’t recorded evidence of their costs or they don’t realise what expenses and allowances they can claim.
All self employed people are allowed to claim tax allowable expenses so it is important you get into a routine of recording your income and expenses on a regular basis if possible. We have listed below the most common expenses which can save you tax.
CIS Tax repayments
If you are a Sub-Contractor in the CIS you will have 20% tax deducted by the Contractor from your gross payment. (30% if you don’t have a UTR) Don’t worry, after your Tax Return is completed and any tax due is calculated, the tax deductions will be credited and in most cases this will result in a refund of tax for you.
CIS Expenses you can claim
Materials used for your work; Consumable tools; Repairs & maintenance of equipment; Insurance; Protective clothing such as Overalls and Work Boots; Laundry & Cleaning; Telephone Landline – Business use; Mobile Phone – Business Use; Internet; Advertising; Postage & stationery; Use of home as office; Computer consumables; Trade Magazines; Bank charges on business account; Accountancy fees; Wages; Fares & Travelling expenses; Subsistence (if working away from home); Vehicle running costs (read notes below); Fuel; Repairs & Maintenance; Road tax, insurance & MOT; Cleaning; Parking & Tolls.
Please note : If you use your vehicle for your own personal use then you need to factor this in when any expenses are claimed. For example if you calculate that you use your vehicle 20% of the time for personal or family use, then you would need to reduce any relevant vehicle running expenses by 20%.
An alternative to claiming the vehicle running costs is the HMRC’s Fixed Scale Mileage Rate which is currently 45p per mile for the first 10,000 and 25p thereafter. This includes a depreciation allowance (capital allowance) for the vehicle but does not include interest on any loan to purchases the vehicle. This can be claimed in addition to the mileage allowance.
For more information on CIS Expense Claims, please contact us.