CIS tax refund for companies

When a contractor pays your company “under deduction” (i.e. net of tax) for work, it must give your company a statement showing the full amount of the payment and the deduction that it has made from that payment. 

You will need to enter these on your company's Employer Payment Summary (EPS) returns. The CIS deductions you have suffered will then be offset against the company’s PAYE liabilities for the year to date.

Limited companies that have an excess of CIS deductions, will not be able to claim a repayment of these until:

• The final Full Payment Submission (FPS) for the year has been submitted (due by 19th April each year where payments to employees are made in the period 6th March to 5th April)
• The company has paid all amounts due to HMRC for the tax year in their capacity as an employer/contractor
• The tax year in which the CIS deductions were made from the company has ended

So if you find your company has an excess of CIS deductions for the 2020/21 tax year then you can look to claim these back now. 

We would be happy to manage your CIS affairs or any other of your accounting or tax needs so get in touch today. Call us on 01423 871 870 or complete our contact form here to arrange your free initial consultation.

Date published 30 Jan 2020 | Last updated 23 Apr 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.