CIS and Close Company

CIS and Close Company

Didn't find your answer?

Probably easier if I use some very simplistic sample figures to illustrate my question:

Earnings £30,000
Net received by Company £24,000
CIS credit of £6,000

He is intending to remunerate himself as follows:
£10,000 salary
£20,000 profits
CT of £4,000
CIS/CT rebate of £4,000

£2,000 PF outstanding CIS tax - is this credited to the company or is it lost - adversely affecting the tax free nature of the £10,000 personal allowance?

Thanks,

Replies (6)

Please login or register to join the discussion.

By JCresswellTax
23rd Apr 2014 17:12

The CIS deduction

Will be on the PAYE account.  The company would then receive this back after deducting any relevant PAYE/NIC on the £10k salary.

An alternative would be to request it be transferred to CT to be offset against the £4k liability and then request repayment of the balance from there.

Thanks (0)
avatar
By Crestax
23rd Apr 2014 18:02

The CIS Deduction

The rules are quite clear

it is firstly set against any PAYE taxes otherwise due(still unpaid) for the relevant tax year. Should there be any CIS tax unrelieved the Company claims a refund of the surplus direct from the IR PAYE Office- it cannot be set sideways against Corporation Tax (though it would be wise to earmark the refund for precisely that purpose!)

Thanks (0)
Replying to lionofludesch:
By JCresswellTax
24th Apr 2014 09:07

Why do you think you cannot do this?

Crestax wrote:

The rules are quite clear

it is firstly set against any PAYE taxes otherwise due(still unpaid) for the relevant tax year. Should there be any CIS tax unrelieved the Company claims a refund of the surplus direct from the IR PAYE Office- it cannot be set sideways against Corporation Tax (though it would be wise to earmark the refund for precisely that purpose!)

I have actually done it on numerous occasions for clients.

Thanks (0)
avatar
By stephenkendrew
23rd Apr 2014 22:09

Yes it can!

Last week HMRC issued this guidance: -

http://www.hmrc.gov.uk/news/imp-to-cis-repay.htm

 

which, amongst other things, says "HMRC can set-off the company's CIS repayment against its Corporation Tax..."

Thanks (3)
Replying to Wanderer:
By JCresswellTax
24th Apr 2014 09:08

Exactly!

stephenkendrew wrote:

Last week HMRC issued this guidance: -

http://www.hmrc.gov.uk/news/imp-to-cis-repay.htm

 

which, amongst other things, says "HMRC can set-off the company's CIS repayment against its Corporation Tax..."

Thanks (0)
avatar
By Crestax
24th Apr 2014 17:18

Company CIS tax

Thanks for the correction

Clearly since May 2013 the Revenue has changed its stance as I had 2 clients where the proposed set-off against CT was refused!

Thanks (0)