CIS tax return & rebates/expenses

raisind

Hello,

I am registered under the CIS scheme and am considered a subcontracter contracting with a company called 'the guild'. Im supposedly self employed and this company forward my wages after tax to my bank account. I have to complete a tax return each year with hmrc. Ive been told i can claim expenses for money spent on travel, equipment ...etc . however i would like to know if these expenses can be claimed at the end of the tax year along with my self assesment tax return. i havnt performed one before and would like to know if this is possible to do so myself or is it essential i have an accountant to do so for me,

many thanks for any replies.

chrismac1

I'd say that it is possible to do this yourself, but there are various pitfalls. Overall it is likely you will be safer with an accountant. This is because:

1. A decent one can advise you on your employment status. It is very possible that a few modest changes in the way you are operating your contract will make your "supposed" self-employment status a lot more solid. You have some breathing space on this as HMRC have made a right Horlicks of this issue - google "IR35 HMRC lost cases" for a laugh at their expense, unfortunately also at the taxpayers' expense as they've wasted millions of pound chasing thousands.

2. Through no fault of your own you operate in the sector most likely to get a visit from HMRC. In fact the CIS exists for this very reason - your very own sector tax system, so other sector of the economy has its own system! I am extra careful with CIS clients - contractors or sub-contractors - because it is statistically more likely we will get an enquiry or inspection. Unfortunately most of my CIS clients bear out the reason for this, with poor record-keeping and indeed a poor attitude to paying tax in general. Please make every effort not to be like this, if you want more specific help on your record-keeping PM me and I'll send you some links.

3. If you get a decent accountant and have kept decent records, you can look forward to a tax repayment to your bank account by early May - early June at the latest - and every year thereafter. The 20% deduction is set to take more tax off you than you need to pay. For this reason, I prioritise all my CIS sub-contractors in April each year, because as soon as I've done their accounts and submitted their tax returns - well within 3 weeks of that to be precise - a credit will be hitting their bank account. Given the dire straits of the sector right now this cash will be very welcome to all of them. So find someone who commits in writing to a submission by 31 May 2011 or earlier once you've provided all the necessary info.

villabadger

I wholeheartedly support the excellent advice that chrismac1 has already offered. As someone who employs the services of subbies and has to delve into the mirky world of CIS, I would advise that it is essential to use a professional to ensure you maximise the amount of refund due to you. It will cost you around £200ish (in my experience), assuming you have all of your information in order, but it will be money extremely well spent.

As an aside, I assume you have kept your monthly statements of deductions from the contractor?

Most of the subbies I use actually have their books done by the same Accountant as I use. I am more than happy to give you his details should you need a recommendation

raisind

chrismac1 wrote: »

I'd say that it is possible to do this yourself, but there are various pitfalls. Overall it is likely you will be safer with an accountant. This is because:

1. A decent one can advise you on your employment status. It is very possible that a few modest changes in the way you are operating your contract will make your "supposed" self-employment status a lot more solid. You have some breathing space on this as HMRC have made a right Horlicks of this issue - google "IR35 HMRC lost cases" for a laugh at their expense, unfortunately also at the taxpayers' expense as they've wasted millions of pound chasing thousands.

2. Through no fault of your own you operate in the sector most likely to get a visit from HMRC. In fact the CIS exists for this very reason - your very own sector tax system, so other sector of the economy has its own system! I am extra careful with CIS clients - contractors or sub-contractors - because it is statistically more likely we will get an enquiry or inspection. Unfortunately most of my CIS clients bear out the reason for this, with poor record-keeping and indeed a poor attitude to paying tax in general. Please make every effort not to be like this, if you want more specific help on your record-keeping PM me and I'll send you some links.

3. If you get a decent accountant and have kept decent records, you can look forward to a tax repayment to your bank account by early May - early June at the latest - and every year thereafter. The 20% deduction is set to take more tax off you than you need to pay. For this reason, I prioritise all my CIS sub-contractors in April each year, because as soon as I've done their accounts and submitted their tax returns - well within 3 weeks of that to be precise - a credit will be hitting their bank account. Given the dire straits of the sector right now this cash will be very welcome to all of them. So find someone who commits in writing to a submission by 31 May 2011 or earlier once you've provided all the necessary info.

thanks for the advice, i know what you mean by subcontractors having a poor attitude to paying tax, seems everyone just lets someone else deal with the issues but if its not too complicated ild like to handle the tax myself, but i suppose an acccountant would be a good idea considering im not used to it.

I only been working for 10 months or so so as for record keeping ive got all my weekly payment statements showing deductions and reciepts ive collected.

as for an accountant i think i may aswel get one as bodging my tax return up for a first time probably isn't a great idea, do most accountants have experience with cis sub contractors or are there places specifically dedicated to that?

many thanks once again

raisind

villabadger wrote: »

I wholeheartedly support the excellent advice that chrismac1 has already offered. As someone who employs the services of subbies and has to delve into the mirky world of CIS, I would advise that it is essential to use a professional to ensure you maximise the amount of refund due to you. It will cost you around £200ish (in my experience), assuming you have all of your information in order, but it will be money extremely well spent.

As an aside, I assume you have kept your monthly statements of deductions from the contractor?

Most of the subbies I use actually have their books done by the same Accountant as I use. I am more than happy to give you his details should you need a recommendation

thanks aswel for your reply, so £200 for an accountant, i shouldn't be needing too much time with an accountant so could i just hire one for a couple of hours or so or do i require more time?

yes ive kept all my weekly payment statements from my contractor and reciepts gained. many of them bein reciepts from the use of public transport, is this an allowable expense to claim do you know?