This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Company CIS

JasonD
Posts:34
Joined:Wed Aug 06, 2008 3:47 pm

Postby JasonD » Thu Feb 22, 2007 4:49 am

The company is approaching the end of its first trading year and the turnover is 120k - invoices are paid net of CIS deductions so the company has had 21.6k deducted throughout the year. The estimated annual proft after paying subcontractors and general admin expenses will around 60k, so the CT on that will be iro £11k. Questions:

How long will it take HMRC to refund the company the difference of approx 10k?

Where is the 10k overpayment difference shown on the balance sheet - debtors?

Does the company have to send in the CIS couchers with its CT return?

Thanks in advance - the accountant is doing his impression of the invisible man at the moment.

adi36
Posts:477
Joined:Wed Aug 06, 2008 3:23 pm

Postby adi36 » Thu Feb 22, 2007 5:18 am

1. About six weeks after subission CT600 on average.

2. it can be depends on your usual accountancy procdure

3. No but it should keep them in case they are requested.

adistevens36@hotmail.com

JasonD
Posts:34
Joined:Wed Aug 06, 2008 3:47 pm

Postby JasonD » Thu Feb 22, 2007 5:40 am

Thank you.

Balmain
Posts:203
Joined:Wed Aug 06, 2008 3:44 pm

Postby Balmain » Fri Feb 23, 2007 12:59 am

Dear JasonD

The advice above is wrong as is your understanding of how it works.

CIS for a Limited Co. is off-set against the PAYE deductions and shown in box28 of the P35.

You will reclaim the £21k via PAYE and make payment of £11k via CT assessment. You can request the Revenue transfer the net amount to the CT account but I’d rather have the short term cash flow.

The over payment is a Dr balance of PAYE and shown as ‘other debtors’.

Balmain

CDavey9501@aol.com
Posts:513
Joined:Wed Aug 06, 2008 3:13 pm

Postby CDavey9501@aol.com » Fri Feb 23, 2007 3:25 am

Yes I agree with Balmain. The set-off of subby tax against corporation tax ended many moons ago.

JasonD
Posts:34
Joined:Wed Aug 06, 2008 3:47 pm

Postby JasonD » Sat Feb 24, 2007 4:42 am

Thanks both.

I am still not sure that I understand this correctly - this is not a set off of subby tax against corporation tax. Setting the subcontractors aside, the company has paid 18% of its entire revenue for the year as witheld tax yet its profit will only be half that of its revenue, therefore reducing the amount due to 10k less than the amount paid.

There are no PAYE deductions as the two directors are only drawing 5k per annum through wages.

Can you confirm that the way that you have suggested is the right way to reclaim, i'm sorry to ask again I just want to check that we do not have crossed wires here.

Thanks in advance.

Balmain
Posts:203
Joined:Wed Aug 06, 2008 3:44 pm

Postby Balmain » Mon Feb 26, 2007 3:05 am

Dear JasonD

Yes, you reclaim the CIS tax you have paid on income via the P35 after 5 April. Hopefully the refund has come through before you have to pay the CTax.

The idea is that you could reduce your monthly PAYE for CIS tax paid, however in your case there is no monthly PAYE. I do have a number of clients in the same position as you.

Balmain

thehoodedclaw2008
Posts:1
Joined:Wed Nov 05, 2008 12:45 pm

Re: Company CIS

Postby thehoodedclaw2008 » Wed Nov 05, 2008 12:46 pm

I see they are claiming that penalties on CIS arer running at £180m now! This can't be right can it? That's ridiculous - I thought the estimates for £90m were high. Just what construction firms don't need right now:

http://www.contractjournal.com/Articles ... -180m.html

The sheer number of appeal upholds is huge too - 185,000 out of 227,000.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Company CIS

Postby robbob » Wed Nov 05, 2008 1:04 pm

Hi Mr Claw

I would guess alot of these penalties are generated in error, we have had quite a few where clients had ceased or we had avised returns were no longer needed, generally a quick call and these were cancelled.
A figure penalties paid and received would be a much better indication of the actual level of fines.


Return to “Company Taxation”