Are You Working In Construction? You May Be Due a Massive Tax Refund
I was reading an article in one of the online newspapers recently that claimed thousands of Brits could be entitled to a massive tax refund from HMRC, with claimants on average owed £2,500 for an initial four-year claim and around £929 a year after that, according to RIFT Tax Refunds. Their study is based on those who are self-employed, working in certain industries and who have not claimed for business work expenses that they are entitled to deduct from their taxable income. They then go on to report that people who are self-employed within the construction industry could be due the biggest payday, with the average claimant receiving a refund of £1,698. On average, those working full time in construction who aren’t self-employed could also be due to an average of £1,244.
Their finding is based on data gathered in relation to frequent travel to a range of locations requiring spending on accommodation and other things like food and drink. The government has a great website with further details of what expenses are claimable, and care should be taken to ensure that the expenses incurred are solely for business purposes. If you have limited expenses, you can look to claim the £1,000 trading allowance. If you're looking to replace any plant and machinery (including computer equipment), you need to ensure that you have claimed the correct capital allowances each year.
If you are a subcontractor in the construction industry, you need to ensure that you follow the Construction Industry Scheme (CIS) rules and, depending on your level of activity, you should look to register for gross status which will obviously have a positive impact on your cashflow - especially since most subcontractors' cashflow has been adversely affected by the introduction of the VAT domestic revere charge last year. Finally, it’s important to ensure that you maintain the correct business records and (again), the government website has guidance on this for you: Business records if you're self-employed.