How to reclaim CIS Tax suffered, if you are a…

…Limited Company

Did you know that any CIS tax deductions that your Limited company has suffered, can be offset throughout the tax year?  If you are due to pay any PAYE tax and National Insurance liabilities or any CIS tax deductions the company has made from its own subcontractors, then the amount of CIS tax suffered can be deducted from this amount.  Don’t wait until the end of the tax year if you don’t have to!

If the amount of CIS tax suffered is more than the amount of PAYE tax due to be paid at the end of the tax year, then a repayment can be requested from HMRC.  This must be requested in writing to: HM Revenue & Customs, Customer Operations Employer Office, BP4009, Chillingham House, Benton Park View, Newcastle upon Tyne, NE98 1ZZ.  This can only be done after the company’s Employers Annual Return Form P35 has been filed online at HM Revenue & Customs (HMRC), and HMRC will only look at repaying the CIS tax suffered after 4 June.

Companies will need to:

Keep all the Payment and Deduction statements received from the contractor(s) the company has worked for.

• Check that the correct Unique Tax Reference (UTR) number and that the correct amount of CIS tax deduction is shown on all these statements.
• Input the total amount of CIS tax that your company has suffered, and also the total amount of CIS tax that your company has deducted from subcontractors, for the tax year, when submitting the Employers Annual Return Form P35.

This is so that HMRC can reconcile the total PAYE payments made during the year.  Before HMRC will refund any CIS tax suffered, they will check that the amount of CIS tax suffered shown on the Form P35 matches the amount of CIS tax suffered they have allocated against your company’s UTR number. 

…Sole trader or partnership

If your business is a sole trader or partnership and has suffered CIS tax deductions on payments made during the tax year, you can claim a refund of CIS tax suffered on your Self Assessment Tax return.