Tradesmen - FAQs
CIS is short for Construction Industry Scheme. It’s HMRC’s way of collecting income tax from people who work in and around the building industry as subcontractors rather than employees.
A bricklayer submits an invoice to the building firm for the work he has done. The building firm pays him, but keeps back a certain proportion as tax under the CIS, and pays this over to HMRC.
The bricklayer then records the amount of tax that has been deducted from his invoices and shows this on his tax return, so that he does not have to pay that tax again.
All expenses must be solely for business use and HMRC may ask you to provide proof of this. There are several expenses you can and can’t claim. Expenses are deducted from your annual turnover and because you are only taxed on your profits, the larger your expenses bill the lower your tax bill will be.
Your Sidekick can help you to complete your personal and business year-end tax return to ensure you are claiming all the expenses that you are entitled to. Get in touch with us today to find out more.
Simply snap a picture of your receipt with your phone, upload it into our cloud based software and never forget to record an expense again. You can also customise a comprehensive list of expense categories to build accurate accounts which makes things a whole lot easier!
If HM Revenue and Customs finds out that you have not declared income on which tax is due, you may be charged interest and penalties on top of any tax bill, and in more serious cases there is even a risk of prosecution and imprisonment.
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