If you have employees from which you have deducted PAYE and National Insurance (NICs), you may offset the CIS deducted by your customers from the amount you are due to pay to HM Revenue & Customs (HMRC) each month/ quarter. HMRC offer Form CIS132 to keep a record of how much CIS deductions have been offset.
Please note, if your CIS deductions exceed the amount of PAYE and NICs due, you cannot claim a refund. You must instead carry forward the surplus to the next payment you are due to make to HMRC.
You will need to enter the total CIS deductions taken on the P35 Employer Annual Return too, which is due at the end of the tax year by the following 19 May. HMRC will repay the company any balance of deductions that your company was not able to offset during the year.
Please note, only companies can use the P35 to recover CIS deductions taken from payments; not individual subcontractors or partnerships.
If you don’t feel confident dealing with, please feel free to get in touch with your local TaxAssist Accountant who would be happy to help you with this.