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Here is an idea...
Why don't you speak to an accountant or adviser?
They are sure to be able to help you.
That is what people do when they need help in this area.
Its a whole big business is advising people in this area.
Good luck.
You're welcome.
The short answer is
You can't. Although if you write to HMRC, as suggested above, some idiot might get it wrong and offset the two.
The rule is that excess CIS tax deducted should be claimed back via the end-of-year PAYE returns. HMRC should only offset excess CIS tax against CT where that CT is overdue and even then it will depend on the company's accounting periods. But ... I have seen HMRC getting it wrong and allowing an offset, so no harm in asking.
Are you sure?
The rule is that excess CIS tax deducted should be claimed back via the end-of-year PAYE returns. HMRC should only offset excess CIS tax against CT where that CT is overdue and even then it will depend on the company's accounting periods. But ... I have seen HMRC getting it wrong and allowing an offset, so no harm in asking.
What makes you think this? There is even guidance from HMRC, or there at least was last time I check, on what should be included in the letter when requesting CIS offset against CT.
I have had CIS offset against CT for at least the last 4 years with the balance refunded to clients company. Year end is 31/03 and CIS to 05/04 for same year has always been offset. As above for the last couple of years I have called HMRC to ask for the offset rather than writing to them and this has sped up the offset/refund.
Sorry Ruddles
The rule is that excess CIS tax deducted should be claimed back via the end-of-year PAYE returns. HMRC should only offset excess CIS tax against CT where that CT is overdue and even then it will depend on the company's accounting periods. But ... I have seen HMRC getting it wrong and allowing an offset, so no harm in asking.
.... but this is nonsense. CIS tax isn't like ACT.
Setting it against PAYE will get you the tax back more quickly but, after that, you can set it against Corporation Tax and the excess will be repaid to the company.
If your accounting year end isn't 5th April, there are some more rules, which I won't go in to at this time.
HMRC guidance April 2014 re: CIS repayts - set offs
On or just before 14th April 2014 HMRC published the following:
Setting off repayments against other HMRC liabilities
When you send HMRC your company’s claim you can ask them to set off any repayment due against your company’s other HMRC liabilities. HMRC can also include debts covered by a time to pay arrangement.
If you want the repayment set off against an outstanding Corporation Tax (CT) liability, HMRC need to know your CT Unique Tax Reference (UTR) and either the end date of the CT accounting period (AP) or your AP number. If you would like the repayment set off against VAT, please tell us your VAT registration number and the VAT return period.
All I can say is that your clients have been fortunate. The legislation is quite specific as to when CIS tax may be offset against CT liabilities. So, yes I'm sure of what the legislation says. I'm less sure that HMRC are aware of what it says.
HMRC claim guidance c.14 April 2014
How to claim a repayment
When you have filed your company’s final Employer Payment Summary (EPS) and all associated Full Payment Submissions (FPS) for the tax year, you should claim any repayment in writing. Send your claim to the address shown at the end of this helpcard. Give the reasons for the overpayment. If you prefer HMRC to make the repayment electronically, give your company’s bank details. Remember to quote your full company name and PAYE references.
You do not have to send in any supporting documents with your claim at this stage. If HMRC cannot agree your whole claim, they will ask you for your payment and deduction statements and supporting evidence of receipt. HMRC can still consider a part repayment for the deductions they can agree.
Getting your company’s CIS repayment
HMRC aims to improve its service for customers who request a CIS repayment. They will process CIS repayment claims received in writing within 25 working days from the date of receipt where the claim matches the information HMRC holds.
Where there is a mismatch, HMRC will need to take up the discrepancy with you or the company’s agent. The speed at which HMRC can process the full repayment will, in part, depend on how soon you or your agent responds. In these circumstances, HMRC will aim to make a part repayment of the amount they can agree and will do so in the above timeframe.
Making the repayments directly into the company’s, or its nominee’s, bank account
From April 2014, HMRC will be able to make repayments through BACS, in certain circumstances. If the company would like its repayment to be made through BACS to its own, or a nominee’s, bank account, please send HMRC the following information with the claim:-
PAYE reference
employer’s full name
8-digit bank account number
6-digit sort code number
bank account holder’s name
signed authority to repay the company’s nominee (if appropriate)
HMRC cannot make BACS payments for years before a contractor started to report their PAYE information in real time or where they are making a part repayment / part reallocation to another debt.
The only thing I have found which says you can not offset CIS against CT is something saying you can no longer do it on the CT return. It states you can no longer the enter the amount on the CT form and have the balance refunded via CT rather than CIS.
I think when I first looked at this the reason for offsetting it is that HMRC will not refund the full amount unless the CT liability has already been paid. In my clients case this would cause an issue as the would be unable to pay their CT bill without the CIS refund.
The key word in HMRC guidance is "outstanding". See Reg56(6)
B and Co - year-end 31 March, CT due following 1 January. Why would you want to wait 9 months for a refund/offset when you can get it in a matter of weeks?
Let me muddle through to the bank with my cheque ....
B and Co - year-end 31 March, CT due following 1 January. Why would you want to wait 9 months for a refund when you can get it in a matter of weeks?
Because you can't set off 2015/16 CIS suffered against 2016/17 PAYE ? Maybe because it keeps building up ?
Eh?
2015/16 - CIS deducted will (should) have been offset against PAYE liabilities for 2015/16. If 2015/16 CIS deductions exceed 2015/16 PAYE liabilities you ask for a refund on 6 April 2016 - to be credited direct to your bank account. What is so difficult about that?
I can't think of any sound reason for waiting until 1 January 2017. Can you?
Assuming you know the CIS amount...
I have just put the phone down having had an pleasant call from HMRC CIS - for once I didnt end up moaning about inefficiency.
My client has had problems in that he cant get his CIS refunded due to one of the contractors he worked for going out of business. We (HMRC and I) have spent nearly a year getting just the 2014/15 sorted.
The system is as follows:
You are supposed (note the word 'supposed'!) to submit a claim via EPS whether that is monthly or at the end of the year on the final one. I can never get client to send the CIS vouchers every month - no idea what I'm going to do when the quarterly submissions come in.
HMRC will check and see whether their submission figures match with the claim.
If not they will send a letter asking for a list to be written (for some reason it has to be handwritten on their particular form) and CIS vouchers submitted and also to see the bank statements duly annotated.
Once the actual figure is agreed then a final EPS must be submitted if the figure is different from the original submission. HMRC's phone call today was to agree the actual amount and remind that an (amended) EPS is needed.
Refund cant come to the agent but if you ask they will offset against outstanding corporation tax or VAT. Any balance of refund goes to client which is a pity as I cant take my fees out first as I do with any other refund.