Offset CIS deduction suffered against my subcontractors

[Stan Stefanov]

I have a building company and I am now paying to subcontractors off which I deduct 20%.
I as a company have also been taxed with 20% from my contractor.
Does any one know how I can offset my deductions against the ones which I've made?

thanks,

Stan

 

[Becky]

With CIS it is important to think of your role as a contractor completely separately to your role as a subcontractor. Unfortunately you cannot net off the amounts collected against the amounts deducted.

Subcontractor: You have suffered deductions, and as a company you would normally set any CIS deductions against your monthly PAYE and Class 1 NIC liabilities. If this does not fully recover your CIS deductions, then HMRC will repay the net figure once you have filed your P35 at the end of the year.

If you do not want to suffer deductions, you could look into being granted 'Gross Payment Status':
HM Revenue & Customs: Getting paid and paying tax - advice for subcontractors

 

[Stan Stefanov]

does that mean that for now i can only deduct the 20% from my subcontractors without actually paying anything to the tax office and once the time comes for P35 i should just state the deductions I have suffered and the deductions i have done. do I need to actually fill in any other returns meanwhile. I will be doing my own accounts this year (my first year) and would like to know how to sort out those payments exactly if anyone knows. I do not have anyone on a payroll currently so I don't owe any paye taxes or NIN contributions

thanks

 

[Becky]

You need to register with HMRC as both a contractor and a subcontractor. Your role as a contractor is to pay subcontractors in the appropriate way - eg if they have gross payment status you pay them gross, if not then you pay them net as advised by HMRC. You should pay any deductions taken from subcontractors to HMRC every month when you file the forms. This is of course just a rough outline of some of the obligations - you should read up in detail here:

HM Revenue & Customs: Construction Industry Scheme

If you have not been following the right procedures then it would be best to get in touch with HMRC asap.