How to get your CIS back for Ltd Companies
First up, stop HMRC from deducting CIS from you again by applying to be a gross registered contractor. This adds 20% to your cash flow straight away! It must be done.
CIS can cause horrible cash flow issues.
For ltd companies CIS is recovered through the monthly payroll. It is deducted from the tax you need to pay over every month on behalf of your employees.
However, most companies do not have enough payroll tax against which to recover their CIS against. And this can cause terrible cash flow issues.
The balance of the CIS cannot be reclaimed until after the end of the tax year in which it was deducted.
On April 6th and afterwards you can make your claim for repayment of overpaid CIS.
There are 3 ways you can make your claim:
Ask your accountant to do it for you
Write a letter to HMRC
Here's the information on the HMRC website as to how to make your claim.
You can also request that the CIS can be offset against your corporation tax or your VAT bills.
After you have submitted your online form or written to HMRC, they will write back with a list of the deductions they have on their records. If the contractor that you have done the work for hasn't updated HMRC properly with your deductions, then you will need to send evidence over to HMRC. This is required in most cases.
You will need to send over bank statements and invoices to prove that you were deducted CIS from each transaction.
It's important therefore when you are doing your regular bookkeeping and you have CIS deducted, to keep the relevant bank statement and invoice in a folder ready for HMRC at the end of the tax year, this will give you the quickest repayment process.
HMRC can take a long time to process these and pay out any refunds. So be prepared for this in your cash flow forecast.