The refund you may get back depends on three things: Your CIS deductions, total earnings and business expenses. The average Tax refund for our customers is £2,300. In some cases you can receive several years of overpaid refunds — if you’re eligible, CIS Tax can even be claimed back for the previous four years. As a CIS worker, you’ll be required to make contributions for Tax and National Insurance each month.
The amount of Tax you pay is typically 20%, but will be determined by HMRC when the contractor you work for verifies your UTR number. Your refund calculation starts by looking at your total income for the year and deducting any allowable business expenses. When you know exactly how much profit you’ve earned for the Tax year, you can then work out how much of it you have already paid.
Remember, you will take into account your Tax-free earnings and any National Insurance contributions too. Finally, once you know your income, profit, Tax and National Insurance contributions, you’ll take the difference between the Tax you've already paid and the actual figure you’re required to pay. This will show you whether you’re entitled to a refund, or subject to a liability (a bill for Taxes to be paid).