CIC overpayment set off to CT- bit of a twist.

Two separate agents. Who makes the claim?

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A profitable micro company (two directors- sole employees) has suffered a substantial CIS deduction.  Next to no PAYE liability and as their subcontractors have Gross payment status.  So it's necessary to persuade HMRC to offset against Corporation Tax- no chance of getting Gross Payment themselves. 

But.... who does it?  we are linked closeley to a separate firm who, with full blessing, is recognised PAYE/CIS Agent with HMRC.  With our "colleague's" agreement we just generate the annual accounts and CT600- and we are recognised CT Agents with HMRC. 

(No comments about this arrangement, please- it has worked fine for years and is due to time and resources).

Now the question- HMRC website very clear.... Agent can request set-off.   But which Agent? 

Many thanks in advance- for sure we cannot be the only case like this.  (I hope)

Replies (6)

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By rmillaree
14th Mar 2023 09:53

for limited company whoever runs the paye would normally be reponsible for ensuring cis credit is "booked" - it cant be refunded or offsett until its booked after year end - and when booked you normally request where it goes. Presumably authorisation needed to do that - so again makes sense paye agent does teh processing

However hmrc dont care its always up to the 3 parties involved to agree everything - so at the end of the end of the day any acountant may turn round and say thats not what i agreed i would do with my client - (they arent paying me to do that) . Pretty poor though if two accountants cant seamlessly sort this out behind the scenes by making mutual agreement so at least what needs to be done is done - note paye agent needs to know what other parties want done with credit so they may need instructing.

Note normally its best simply to ask for refund to be paid to bank account x - hmrc will normally automatically sort out corp tax bills if coproration tax is overdue - alebit we tend to specify what wants going where bearing in mind nowt will probably happen before the end of june.

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By lesley.barnes
14th Mar 2023 09:58

Normally the CIS suffered goes into the payroll system to create the repayment. I would say that whoever has got agent status for payroll would need to do it because that is were the repayment is. If it is for the tax year 2022-23 it can't be done until after the 5th April 2023.

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Danny Kent
By Viciuno
14th Mar 2023 10:11

Don't think the CT agent can even do this. The offset is made as part of the CIS claim, which the PAYE agent would do as they are authorised and have all the payroll details to hand.

It takes a whole 2 extra seconds doing this is part of the CIS claim (so don't entertain idea of client being billed extra for this on-top of the CIS claim - probably took you longer to write you question that it will take them to add the CT offset to the claim). One of the questions is if they would like to offset CIS to CT liability, answer yes and copy paste the figure from your email advising client how much is outstanding.

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By Paul Crowley
14th Mar 2023 14:36

PAYE reclaim is the standard

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Replying to Paul Crowley:
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By Hugo Fair
14th Mar 2023 15:25

Welcome back, Paul (from wherever you've been - which I hope was enjoyable).

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By WallyGandy
15th Mar 2023 10:13

Morning folks- many thanks for the responses. Actually it's much as we thought. Have a great relationship with our associate but this particular case in a total mess of client's own making- neither of us happy about approaching HMRC!! Had to throw this open for comment as our associate needed confirmation.....

The die is cast- they will have to do it but we'll do all we can to assist.

Thanks to all respondents (from us, that is!)

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