CIS & Corp Tax

LeedsAccountant Registered Posts: 4 New contributor ?
I have a client who has a limited company. He works for various firms with his company as a sub contractor and CIS tax is deducted from the income. Now I have just prepared his accounts and planned to offset this CIS tax against his corp tax as I have done before but the revenue have told me this is no longer allowed, does anyone know why?

His corp tax is now due 1st Nov and the revenue are advised he is unlikely to get his CIS tax refunded before 4 Jan 12, without this refund he will be unable to pay his corp tax. Previously I have off set the corp tax against CIS and had the difference refunded.

I am unsure as to what to do next as the revenue don't seem to be any help at all.


  • stevo5678
    stevo5678 Registered Posts: 325
    You can offset it but not on the ct600. You need to write off to hmrc and inform them of your intention. If the tax is due soon then you may need to pay it as the offset administration may take some time. Cis132 is a good record for your client to keep.
  • groundy
    groundy Registered Posts: 495
    Have you submitted a P35 claiming any CIS tax due as at 5 April? If not then you need to amend the P35, you can then apply to offset any rebate against the CT due. However, HMRC are slow and are still dealing with claims submitted in April!!!

    They will charge interest which you will have to appeal against at a later date and unfortunately CIS and CT don't speak to each other so may be a few letters and phone calls.
  • peaman
    peaman Registered Posts: 123 ? ? ?
    Call both the PAYE and CT district and let them know that you are going to offset the CIS against CT. Then write to them both just to put it in writing.

    Then tell your client what you have done and tell them to let you know once they receive further demands from HMRC (inevitable) or visits from bailiffs (likely).

    It doesn't seem to matter how many phone calls you make or letters you send anymore, nothing seems to stop the debt management letters/calls & bailiff visits!!!
  • LeedsAccountant
    LeedsAccountant Registered Posts: 4 New contributor ?
    I have contacted HMRC and told them that I wanted the CT to be offset against the CIS but they have told me you can't do this anymore, they have not given me a reason why but just said it is not allowed.

    I have sent the revenue a letter requesting the offset and stating if this is not possible my client needs the CIS refund asap in order to pay his CT.

    Thanks for your help, guess I will just have to wait to hear back from the revenue on this one.
  • groundy
    groundy Registered Posts: 495

    You have to submit a P35 showing CIS deducted to claim the refund, they will not action it on the basis if the letter. There is also a strong chance that you will have to submit bank statements and Deduction Certs to HMRC to verify refund due. This all takes time and like I said earlier they are still dealing with refunds claimed in April!

    You should write to HMRC CT telling them when the P35 was submitted and what the refund due is and request no further action be taken against your client until the P35 refund is received this should prevent any visits from Bailiffs.

    This has been the method of dealing with this for a number of years now.
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