CIS tax refund calculator

How can I calculate my CIS tax refund?

Take the tax you owe for the year away from the CIS taken off your pay. The calculator does it in five steps:

1. Add up your pay before CIS came off, including materials you charged for.
2. Take off your expenses, or the £1,000 trading allowance if that is more (not for partners, or for work from your employer or your own company).
3. Take off your Personal Allowance, the part of your income that is tax free.
4. Work out Income Tax and Class 4 National Insurance on what is left.
5. Take that from the CIS taken off. If more was taken off than you owe, the difference is your refund.

What figures do I need?

A year of paperwork, from 6 April to 5 April:

• Your payment and deduction statements for the year, for the pay and the CIS taken off.
• Your expense records.
• Your P60, if you also had a job.
• Any payments on account you made towards the year.

A limited company needs the statements and its payroll figures for each month.

Do materials count as income?

Yes. Put the full invoices in as income, and what you paid for the materials in your expenses. GOV.UK says to record your total pay before deductions were taken, as ‘income’.

So if you invoiced £45,000 and £5,000 of it was materials, put £45,000 as income and include the £5,000 in your expenses.

Why might I owe tax instead of getting a refund?

Because the CIS taken off was less than the tax on your profit. That happens most with higher profits, and when you also have a job, because your job pay uses up the tax free part.

For example, £80,000 invoiced with £10,000 of expenses is a profit of £70,000. The tax on that is about £18,089 and contractors took off £16,000, so about £2,089 is left to pay. GOV.UK: If you still owe tax after this, you’ll need to pay it by 31 January following the end of the tax year.

If CIS and any job covered 80% or less of the tax, and £1,000 or more is left, that 31 January can also bring your first payment on account towards next year, usually half of what was left. The calculator shows it when it applies.

How does a limited company work out its CIS refund?

It sets the CIS taken off its invoices against what it owes HMRC through payroll each month, and claims what is left once the tax year has ended. The deductions are set against:

• PAYE tax and National Insurance for its employees
• its employees’ student loan repayments
• CIS it takes off its own subcontractors

Anything not used carries forward to later months in the same tax year, and the rest is claimed after 5 April. How a company claims it

When can the calculator not give a figure?

When the answer depends on something it does not work out. It stops and says so for:

• a main home in Scotland, which has its own Income Tax bands
• living outside the UK for any of the year
• a student loan or Postgraduate Loan
• Child Benefit, when your income is over £60,000
• other income, such as rent, dividends, a pension or savings interest, or a capital gain
• taxable benefits, such as Carer’s Allowance or Jobseeker’s Allowance, or a company car from a job
• a tax code that was collecting tax you owed for an earlier year
• a business loss when you also had a job, or a loss from an earlier year
• a job as well as a profit over £12,570, as Class 4 then has a yearly limit
• Marriage Allowance or Blind Person’s Allowance
• a business year that, before April 2024, did not end between 31 March and 5 April
• any year before 2024 to 2025

It also leaves out pension contributions and Gift Aid, which may make your refund bigger. For any of these, ask whoever does your tax return.

A few more questions