Unknown to some , if you work in the construction industry, you might be entitled to a refund of some of the money that you pay as tax. This is because if you work in construction, your tax works differently to many other industries in the UK – it’s calculated in advance. This means that your tax is deducted from your wages based on an estimate of how much you will owe Her Majesty’s Revenue and Customs (HMRC) over the course of the year. While this forecast might be accurate, it may also result in you being taxed too much; if this is case, you’re entitled to claim a tax refund.
Am I entitled to a tax refund?
There are two different kinds of tax refunds for workers in the construction industry: construction tax refunds and Construction Industry Scheme (CIS) tax refunds.
Construction tax refunds are the same as in other sectors, in which workers can claim tax back on expenses. In other words, if you’ve had to buy anything – a vehicle, or tools – solely for use in your construction work, you should be able to claim the tax back on the cost of these items.
The second kind of tax refund is the CIS tax refund, which applies specifically to the construction industry. This is based on the fact that, as soon as your tax bill exceeds £1,000 a year, the amounts you’re taxed in the future will be based on a prediction of your earnings.
If these are wrong – and they often are – then you’re likely to be owed money by HMRC, and should take measures to get it back.
If you are eligible for a CIS tax refund, it will be for earnings that you have paid tax on over the course of the last four years. If you’ve never previously had a tax refund and you’ve been working in the construction industry for a few years, it’s advisable that you get in touch with a construction support company who can help you to claim tax back.
You shouldn’t have any qualms about applying for a tax refund. After all, if you apply and are successful, you’ll receive all of your excess tax back. However, if you find that after applying you aren’t eligible for a tax refund, then you needn’t worry, because you won’t be charged for simply requesting the information.