Tax Rebate - Self Employed

chump

Hi,

I work in construction on the CIS scheme. Ive read that when on the CIS scheme you pay more tax (greater percentage) over the year and then when you do your self assesment you tend to get a decent sum back.

I have only one job and have not earned enough to take me into the 40% bracket so without listing all my income and expenditures I was wondering why i would only be getting a rebate this time round of £50!

Other people i know in the same job get hundreds and more often than not thousands back.

Thanks

Elaine_Wilson

Most people have tax deducted at 20% but for the bulk of your income you are due to pay 28% (20% tax and 8% class 4 national insurance). So generally you are underpaying with the direct deductions.

The repayments arise because the deductions are based on your gross earnings but the tax liability is calculated on your taxable income. Taxable income here is gross earnings less allowable expenses less personal allowance.

Since the personal allowance is generally the same for most workers the other people getting large rebates are probably claiming more expenses. Are you sure you are claiming for everything related to your business?

chump

thanks for the reply. i read sometime ago that people under CIS are allowed to claim more substantially for expenses so i have been keeping receipts for all sorts. like clothes for work. tools for work etc etc.

i think maybe i just need to have a rethink and see if there is anything else I could claim in the future.

owls

Hi

I was in the same position,
i found you can claim all your motoring costs against tax, eg insurance, tax etc right down on car/van, a van is better as you get more right down. this cut my tax liability right down.even my fuel bill was nearly 2 thousand for the tax year, that i got against tax but i did have a van so i claimed 100 percent work use.

Penny_Rich

You can't claim all your motoring costs, only those that reasonably relate to your work. So if your vehicle use is, say 50% work, 50% private, then you can only claim 50% of the running expenses.

If you have to provide tools and equipment, protective clothing, then that can be claimed. Also if you have to make business phone calls you can claim for that. Basically, any expenses that have been incurred wholly and necessarily in the course of your self-employment.

Penny_Rich

And if you are claiming expenses you should keep receipts to prove your expenditure, and keep some sort of mileage log if you are claiming vehicle expenses. HMRC may well ask questions, and will expect you to prove any expenses claims that you make.

owls

Yep should have mentioned i only use that vehicle for work, so claim 100% back of all costs.just keep al receipts for everything fuel etc.never kept a mileage log though.