What is the difference between a CIS contractor and subcontractor?

Under CIS, a contractor is a business that pays subcontractors for construction work, or a non-construction business that spends more than £1 million per year on construction. A subcontractor is any individual or business that carries out construction work for a contractor. Both must register with HMRC, and contractors are responsible for making the correct […]

How do I reclaim CIS deductions as a subcontractor?

CIS deductions are offset against your tax liability when you submit your Self Assessment tax return. If the deductions exceed your tax bill, HMRC will refund the difference. Keeping accurate records of all CIS deduction statements from contractors is essential to ensure you reclaim the correct amount.

Can a contractor claim expenses if they are inside IR35?

Inside IR35, expense claims are heavily restricted — travel, subsistence, and home office costs are largely disallowed. Only expenses claimable by a regular employee are permitted.

What is IR35 and how does it affect contractors?

IR35 ensures contractors working like employees pay similar tax. Since April 2021, medium/large private sector clients determine IR35 status. Inside IR35 means Income Tax and NI apply as if employed.

What is the most tax-efficient way for a contractor to pay themselves?

Outside IR35, a low salary plus dividends is typically most tax-efficient. Company pension contributions add further savings. The optimal split depends on personal circumstances and should be reviewed annually.

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