CIS Repayments are very common under CIS for subcontractors that are not in gross payment status. This is why it is essential to have a good understanding of your books and to keep appropriate records because if you have messy books you could be paying more in tax than you should be.
Subcontractors often have unused CIS deductions when contractors deduct 20%/30% from their invoices. These amounts can be used to:
• Offset against PAYE or National Insurance
• Offset against Corporation Tax (if Ltd company)
• Offset against VAT
• Paid straight into your bank account
• Or against any other taxes you might have.
If you are having large repayments every year, it is very advisable to apply for gross payment status.
HMRC wait until after the year-end to make any CIS repayments if they have had more deducted than necessary. HMRC do check and match all CIS repayments to check if the figures reclaimed are correct. Businesses are required to keep supporting evidence in case HMRC have any queries over your figures. This would include keeping all CIS payment and deduction statements they receive from their contractors as HMRC may request them.
If you need any support feel free to message us as always, or if you looking for more information take a look at our CIS Resource Hub.
Frequently asked questions
This article has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
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