As a construction accountant, one of the most common questions I hear from subcontractors is how to recover their CIS deductions. This comprehensive guide will walk you through the entire process of reclaiming CIS deductions efficiently and correctly.
Understanding CIS Deductions Recovery
What Can Be Recovered?
- Monthly CIS deductions
- Overpaid deductions
- Historic unclaimed deductions
When Can You Recover Deductions?
- Through self-assessment tax returns
- Via company tax returns
- Through in-year adjustments
- During payroll processing
Methods of Recovery
1. Self-Employed Individuals
- Submit self-assessment tax return
- Include CIS deductions in relevant section
- Offset against tax liability
- Claim refund of excess deductions
2. Limited Companies
- Report through Company Tax Return
- Offset against PAYE/NICs
- Claim refund through EPS
- Adjust monthly payments
Step-by-Step Recovery Process
For Sole Traders
- Collect CIS statements
- Total all deductions
- Complete self-assessment
- Submit supporting evidence
- Await HMRC processing
For Limited Companies
- Record CIS deductions monthly
- Reduce monthly PAYE payments
- Submit EPS with CIS figures
- Reconcile quarterly
- Claim refunds if applicable
Best Practices for Recovery
Keep Detailed Records
- CIS statements
- Payment receipts
- Contractor details
- Verification numbers
Regular Reconciliation
- Monthly review
- Quarterly totals
- Annual summary
- Contractor statement matching
Timing Considerations
- Submit returns early
- Plan for processing time
- Consider cash flow impact
- Monitor refund progress
Common Recovery Issues
Missing Statements
- Request copies from contractors
- Check online CIS account
- Maintain backup records
- Document all attempts
Incorrect Deductions
- Review calculations
- Contact contractor
- Gather evidence
- Submit formal dispute
Refund Delays
- Check submission accuracy
- Verify bank details
- Contact HMRC if needed
- Consider emergency options
Maximising Recovery Success
- Accurate Record Keeping
- Timely Submissions
- Regular Monitoring
- Professional Assistance
Need More Help?
In our next post, we’ll cover “CIS Record-Keeping Requirements“.
Stay compliant and profitable,
