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CIS-How does owner manged company take monies

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CIS Construction Scheme. Should be a quite basic question.

1/ Does a Company and Individual have their own CIS Registration numbers (in addition to the standard UTR numbers?).

2/ For an owner managed CIS subcontracting Limited Company.  The Limited Company does not  have 'Gross' Status. So tax is deducted before income is received from the Contractor. How does the owner get money of the business?  The owner is the sole employee of the company.  Assuming there are no loans that the director has made to the company what is the tax consequence of an owner withdrawing money out of the business.  I.e. if it is Payroll, then presumably Tax is held back under the CIS rules. If extraction takes the place of dividends, I would presume that the normal dividend rules apply to any company/individual.

Would appreciate some advice.

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01st Dec 2018 11:14

there are no CIS numbers you use the UTR. The company and director use their respective UTR's as required. CIS deducted from the company's receipts is returned where appropriate through PAYE RTI, in most payroll programs there is a box to declare the monthly amount deducted and this is set off against PAYE payable. Alternatively overpaid deductions can be reclaimed through the end of year corporation tax return.

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01st Dec 2018 11:15

Many thanks for this. I agree with the RTI submissions and any reimbursements at the end of year via the tax return.
If the employee who is also CIS registered gets 20% deducted, then the owner gets taxed twice right? First of all CIS is deducted once the Company is paid by the customer. Then SIS is further deducted once the Company pays the employee (who is the owner)?

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to Raj Accountancy
01st Dec 2018 11:31

NO they are separate legal entities you are conflating, the director is being paid by the company he would be on PAYE and paid by dividends as owner (and not have CIS deducted). if he is additionally billing in his own right that is another matter and overpaid tax returned via his self assessment tax return . if an employee is not the owner then yes they would suffer deductions but these will not exceed those suffered by the company

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to Raj Accountancy
01st Dec 2018 11:36

Why would the company make CIS deductions from the money it pays the employee?

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to tonycourt
01st Dec 2018 11:45

quite right was using OP's terminology, should have said subbie or possibly worker

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to Raj Accountancy
01st Dec 2018 19:28

Raj Accountancy wrote:
<
If the employee who is also CIS registered gets 20% deducted, then the owner gets taxed twice right?

Wrong.

Even if he did get 20% deducted (which he doesn't), the company could set the money deducted from its income against the money it deducts from the employee.

CIS tax isn't a charge, anyway. It's just a payment on account.

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01st Dec 2018 11:55

Weirdly, you are wrongly assuming that the director/shareholder is a subcontractor of their own company. As soon as you appreciate that the rest is easy.

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to andy.partridge
02nd Dec 2018 09:20

Many thanks for all posts. Andy.parteidge makes an interesting comment. This is very helpful. I will check the defifinitions of CIS And come back to this forum to explain the outcome.

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to Raj Accountancy
02nd Dec 2018 10:22

Raj Accountancy wrote:

Many thanks for all posts. Andy.parteidge makes an interesting comment.


True.
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to Raj Accountancy
02nd Dec 2018 10:30

we all know the answer and do not need an explanation . Andy is only restating what has already been said :-)

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to carnmores
02nd Dec 2018 13:53

To be fair I did use different words.

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03rd Dec 2018 12:02

Great - thanks all for replies. Quite clear now so much appreciated!!

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