It is common practice in the construction industry to have a tax accountant who works on your behalf. When the UK tax authorities are auditing you for payment of UK corporation tax or other taxes, the accountant will be the one responsible for working out the best way to deduct your UK self-employed expenses or that of your subcontractors. Self-employed contractors and subcontractors in the UK can use the services of a company that offers complete UK tax accounting. The benefits of such outsourcing are reduced cost, high security and privacy, reliability and access to unlimited professionals and rates. It would help if you considered the options available and then chose the best option for you.
Subcontractors and Self-Employed Individuals Pay
You can opt for an Independent Contractor Accountant (ICCA) who is a member of the Institute of Chartered Accountants in the UK (ICCA). The services of these accountants will be beneficial in ensuring that the subcontractors and self-employed individuals pay their due share in the UK corporation tax. The ICCA is one of the many professional bodies in the UK specializing in providing tax accounting services and works to set the standard for tax compliance by the people and companies that use its services.
Consider Opting for the Services of a Tax Preparation Consultancy
If you want to take advantage of the benefits of this scheme, you should consider opting for the services of a tax preparation consultancy. Many tax preparation consultancy firms and agents in the UK offer their services to both small scale and large scale builders and contractors. Some of the most well-known tax preparation firms include KPMG, Fresh Del Monte, Price Waterhouse Coopers and CMC Limited. These firms have an expert team specializing in different areas, including UK tax schemes, such as self-employed liability, subcontractor expenses and construction industry schemes.
Guidelines Provided by the UK Tax Authorities
Once you have chosen a suitable consultant firm for your UK tax schemes, they will draft your tax return plan by the guidelines provided by the UK tax authorities. Most UK tax schemes allow individuals and companies to deduct expenses on their operating cost or business loss. A prime example of a tax rebate strategy is the contractor loss reimbursement. Under this scheme, contractors can claim back up to one hundred per cent of their general contractor fees for expenses incurred in building a new project. A prime example of using this scheme is the HMO constructor reimbursement.
Qualify for this Scheme
Some people may be hesitant in hiring a tax consulting firm because of the concept of sub-contractors. This refers to an individual or company employed by another company to carry out works like designing, planning and installing its equipment or materials. There are many ways in which you can qualify for this scheme. For a start, you should provide all details regarding the sub-contractor to the UK Company Office. If you cannot provide such information, you should apply for an essential permit that will allow you to hire a subcontractor. When applying for the necessary license, ensure that you mention all the details that the UK Company Office needs to know to issue a valid contractor’s license.
Self-Employed Expenditure Allowance
Another type of CIS tax scheme that you might be eligible to benefit from is the self-employed expenditure allowance. In this scheme, you are allowed to claim expenses for some home improvements, travel, and other similar items related to carrying out your job. The amount of tax you are liable to pay on this scheme depends on the percentage of your earnings. Self-employed individuals are always advised to get in touch with their tax advisors immediately to check on eligibility to use this particular scheme.
Expenses for Buying Office Furniture
Another scheme that you might be eligible to benefit from is the self-employed expenditure allowance. This tax scheme allows you to deduct 20 per cent of your total expenses for doing business as a self-employed person. This can include costs for buying office furniture, uniforms, tools and equipment used in your job, and even expenses incurred travelling to and from your place of work. As you can see, this scheme helps you deduct the costs for increasing your earnings and reduces the amount of taxes you need to pay on them.
You can also benefit from an ISA or an Interest Only Investment Subsidy. With this tax scheme, you can choose to invest a modest sum of money each month for a specific time frame. After receiving a tax rebate, you will repay the money you have invested plus a small interest amount each year. You can use the money to repay debts, buy supplies and raw materials that you need to carry out your job and pay for a sub-contractor so that you do not have to hire a person for the task that you want to be done.