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HMRC announce changes to process for sub-contractors to recover CIS suffered

21st Feb 2022
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As a highly-respected sub-contractor and intermediary in the contractual chain, The Guild...
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Business tax

A limited company sub-contractor is able to claim a credit for any CIS tax deduction suffered, which can be set off against its own employer and contractor liabilities due to HMRC by completing the appropriate declaration on the Employer Payment Summary (EPS). Where the sub-contractor is not a limited company, then it should report any CIS deduction suffered on a Self-Assessment (SA) return instead of using the EPS process.

From April 2022, HMRC are introducing an additional field on the EPS which will require a limited company sub-contractor to enter its Corporation Tax Unique Taxpayer Reference (CT UTR) or COTAX reference number in order to be able to claim the credit for the CIS deduction.

HMRC state that any EPS submissions which include a claim for a credit for CIS deductions suffered but which do not include the CT UTR or COTAX reference number will be rejected.

Further, HMRC have made it clear that if the limited company sub-contractor cannot satisfy the new CT UTR validation requirement but wishes to report anything else, then it must remove the claim for CIS deduction credit before re-submitting the EPS.

A limited company sub-contractor which has lost, or cannot find, its CT UTR can request a copy of it online using the following link: Ask-for-copy-of-your-corporation-tax-utr

Any requests using the HMRC online service will result in the CT UTR notification being sent to the business address that is registered with Companies House.

General articles

If you would like to raise anything we’ve discussed in this article, please contact us at [email protected] and talk to our expert team. We’re here to help.

How can The Guild help?

The Guild has in-house ex-HMRC Employer Compliance and CIS experts who can help you with an HMRC enquiry, whether at the outset of the review or at a point where HMRC demands are escalating.

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The content of this article is for guidance only and shall not constitute advice. Please seek independent advice or contact The Guild for information about its services.

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