CIS paid by contractor in next tax year no certificate received

CIS paid by contractor in next tax year no...

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Good morning everyone. This may be a basic question but something that I haven't come across before. I have a client (sole trader) who worked as a subcontractor during 2013/2014. The contractor was very late in paying the client, and the client received the net funds (less 20%), in August 2014, with an email from the contractor apologising for late payment, and saying that the 20% deduction had also been paid August 14 to HMRC.. The client has yet to receive a certificate from the contractor. It isn't a huge amount of money (£1300). My first thoughts were to include it within the 13/14 return, as the income has been earned in this period, but what about the CIS deduction? IF the contractor is telling the truth, then HMRC will have received the deduction in the next tax year, and therefore, if I include it within 2013/2014, the figures @ HMRC will not agree with ours. OR, am I overcomplicating things here - include the income within the 2013/2014 return, but not the CIS deduction, so my client does not get the benefit of the deduction in his 2013/2014 return, but will do in his 2014/2015 return?? Apologies if this is basic, but I would rather ask then get it wrong!

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By Euan MacLennan
21st Jan 2015 10:40

CIS tax based on payment

CIS tax is deducted when the payment is made.  Income is earned when the services are provided.  So, Yes, you include the gross income in 2013/14 and the credit for the CIS tax deducted in 2014/15.

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By levelheaded1903
21st Jan 2015 11:02

Many thanks Euan - its been a long January!

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