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Why do I have unallocated credits for CIS

I have unallocated credits from construction industry scheme.

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I have tried claiming unallocated credits for CIS yet they require lots of stuff so where has the system got this figure from ? 

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RLI
By lionofludesch
09th Mar 2019 18:05

More stuff than you've given us ?

Tell us your story.

Say more or expect less.

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By jcace
09th Mar 2019 22:49

You will have reported CIS suffered via an EPS.

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Replying to jcace:
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By Bec5282
11th Mar 2019 15:17

Hi
Yes that is correct I understand that part .
Does this mean this credit is ours to claim back as a refund ?
My accountant dosnt seem to know I don’t think he’s familiar at all with CIS accounts .
I’ve spoken with hmrc who advised to complete a claim form but now they have asked for lots more information and I’m just a little unsure about all this so was hoping someone would know .

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Replying to Bec5282:
RLI
By lionofludesch
11th Mar 2019 15:47

If this information is confidential, I respect your desire to keep it under wraps.

However, it makes it hard to comment when you say they want "lots more information".

You should compare the tax you've deducted from your employees and subcontractors with the tax you've had deducted by your customers and reclaim the difference. The period is always the year ended 5th April, not your accounting year end.

I haven't done one of these for ages and I would be interested in what is currently the most efficient route to deal with this.

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Replying to lionofludesch:
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By Bec5282
11th Mar 2019 16:03

Hi
So for example if Iv reclaimed 15000 cis suffered for our contractors and yet we’ve suffered 25000 tax paid as we are not gross status an i right in saying we can claim the difference back ? Between the two figures ?
Also our profit for that year was less than the 40percent tax bracket yet out accountant stated we have to pay 40percent as it’s about the gross of the company not what was actually ours .
Thanks

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Replying to Bec5282:
RLI
By lionofludesch
11th Mar 2019 16:24

Bec5282 wrote:

Hi
So for example if Iv reclaimed 15000 cis suffered for our contractors and yet we’ve suffered 25000 tax paid as we are not gross status an i right in saying we can claim the difference back ? Between the two figures ?

Yes. Based on years ended 5th April.

Companies pay 19% Corporation Tax on their profits.

40% is what some, but not all, individuals pay.

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RLI
By lionofludesch
10th Mar 2019 10:50

Are you an accountant, contractor or subcontractor ?

Or more than one of these ?

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Replying to lionofludesch:
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By Bec5282
11th Mar 2019 15:12

Hi
We are a contractor that employs sub contractors . It’s a new company so quite new to it all it’s been running 18 months .
My accountant didn’t seem to have any idea in helping me .

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Replying to Bec5282:
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By Matrix
11th Mar 2019 16:28

If it is a company then you should be offsetting them and can then request the balance to be offset against corporation tax. I don’t understand your reference to paying 40% tax if it is a company, although if you are referring to PAYE, again the tax deducted should have been offset before paying this.

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Replying to Matrix:
RLI
By lionofludesch
11th Mar 2019 16:35

Matrix wrote:

If it is a company then you should be offsetting them and can then request the balance to be offset against corporation tax.

You can't do that any more.

You can only set it against PAYE/CIS.

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Replying to lionofludesch:
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By Matrix
11th Mar 2019 16:46

You mean offset against corporation tax? I thought you could request it but it is not automatic, you have to call up.

No, my main point was that if the company has suffered £25k deducted from its sales and deducted £15k on subbies then they can be offset. Not sure if they have been already. A company can still do that and also against PAYE.

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By jcace
12th Mar 2019 00:30

If it's a limited company:
The company will owe to HMRC the PAYE and NIC on the wages to its employees etc PLUS the CIS it has deducted from subcontractors it has paid - lets call this A.
From this amount, it can deduct any CIS that contractors have deducted from payments made to the company - lets call this B. If B is greater than A, the company can claim a refund of the difference after the end of the tax year.
If HMRC's figures for B don't agree to yours, they will ask for more information. HMRC will receive figures (B) from you via an EPS, but just as a monthly etc total. However, they should also receive details of the CIS amounts from the contractors when they submit their monthly CIS Returns. It's when these don't tally to yours that HMRC begin to ask for more information.
A common error that crops up is where payments are made to a company, with CIS deducted, but the contractor reports the payments under the wrong UTR, typically where a sole trader has incorporated, but not updated the contractor.
You will need to check the CIS statements given to the company and see if the UTR is correct on all of them.

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By Bec5282
12th Mar 2019 07:26

So I completely get the CIS deductions now thank you and claiming the difference between A and B which has been done but this still leaves unallocated credits in the account where my accountant is saying it appears to be credit available to claim back and hmrc are saying yeah ya just claim that back but clearly I’m not entitled too it because it exceeeds the difference between A and B and that was already reclaimed .
Why the two people my accountant and hmrc didn’t tell me I will never know !
Now I am left having to find the corporation tax because there is actually no credit there !

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By northernmonkey
12th Mar 2019 09:04

I don't usually say this but reading this, I really think you should get a new accountant - this is basic stuff!

Perhaps for now, ask HMRC to give you a breakdown of all the credits they have on their record to try and reconcile against the CIS you have claimed thus far.

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Replying to northernmonkey:
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By legerman
12th Mar 2019 10:45

northernmonkey wrote:

Perhaps for now, ask HMRC to give you a breakdown of all the credits they have on their record to try and reconcile against the CIS you have claimed thus far.

Yes, that happened to one of my clients. HMRC said their total was £4k less, but sent a sheet through with a breakdown, and I was able to spot straight away one of the contractors wasn't on the list.

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By Bec5282
12th Mar 2019 14:47

Finally got to the bottom of it and has literally took me all day off work and working on this .
Seems my accountant added the total cis suffered to the last EPS submission instead of the correct amount which then showed we had thousands more unallocated credit we don’t actually have . He still hasn’t realised as Iv been emailing him all day and HMRC and I have got to the bottom of it and now instead of receiving any refund I know have to put the corporation tax into a payment plan ! Gutted and frustrated is an understatement. Should of done this myself and not bothered with the accountant .
I actually questioned him at the time he did it as well !

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