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CIS Deductions

All Matters In Dealing With CIS

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Hi, our Company uses a lot of Subcontractors who which we verify and get all the relevant information needed before payment, however there has been a few instances which has questioned how and when to deduct CIS.

1. Do we deduct CIS from retentions held by the subcontractor? (They are Net tax and have invoiced us with the retention balance)

2. If they are registered for CIS but the work they have done on a one off job is excluded from CIS (As per HMRC's Guidelines) e.g. Laying down cabling. Is this still subject to CIS Deduction?

3. If the client is not registered for CIS, but the work done we believe is subject to CIS - We should deduct CIS at higher rate of 30%, Yes?

4. If we forget to deduct CIS from a subcontractors payment - Should we ask for the overpayment to be returned - Who's responsibility is it?

Any help will be appreciated.


Replies (2)

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By Davis_21
13th Sep 2019 13:01

Hi SpaceAccounts,

1. Yes you deduct CIS from retention payments, please see following link section 6.13

2. If the work done is excluded from CIS as per HMRC guidelines, then I would say no you don’t have to deduct CIS but I would make sure you have some evidence to back this up in case HMRC questions it.

3. If the client is not registered for CIS, you would verify them with HMRC and if they are not registered as a subcontractor then it will come back as un-matched and you would deduct CIS tax at 30%.

4. If you forget to deduct the CIS tax from a subcontractor (I am assuming that you have still reported the CIS tax deducted to HMRC), I would say the responsibility lies with you to collect the overpayment back from the subcontractor. You would still need to hand over this deduction to HMRC.

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Replying to Davis_21:
By SpaceAccounts
13th Sep 2019 13:42

Thanks Davis,

1. Thanks i had already read up on this but wanted to at least ask anyway.
2. Yes will do - Thanks
3. Exactly what i have done.
4. Yes - i had a dispute with the client for a week and they finally agreed and refunded the difference back to us for CIS.

Thanks for your help.

Kind Regards

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