HMRC specifies when companies can claim CIS refunds before year-end

HMRC says limited-company subcontractors can claim a Construction Industry Scheme (CIS) refund before the tax year ends only if their business has stopped trading or deductions have been taken after they changed to gross payment statusGOV. Its revised repayment guidance makes those two circumstances explicitGOV and requires copies of all Payment and Deduction statements and bank statements received during the current tax year.

The previous guidance told companies: “To support a current year claim you should include any related:” Payment and Deduction statements and bank statements. The revised guidance expressly makes the two eligibility circumstances a condition of claiming before year-endGOV. For the gross-payment-status case, HMRC specifies “you’ve had deductions taken after changing to gross payment status”; that condition links the deductions to the period after the change.

For other claims, HMRC says companies can claim once the tax year has ended, with a tax year running from 6 April to the following 5 April. Claims for the past six tax years may be made online or by post; earlier years require a postal claim. The claimant must be a limited-company subcontractor, or its agent, with deductions exceeding the tax that needs to be paid. All Full Payment Submissions, Employer Payment Summaries and Company Tax returns must have been submitted, together with monthly CIS returns where the company is also a contractor.

The overpayment is calculated as total CIS deductions less the tax paid using those deductions. HMRC directs claimants to their monthly deduction statements, payroll submissions and, where relevant, CIS returns; an estimate is acceptable if the amount is uncertain. The company must provide its contact details, PAYE reference and Corporation Tax unique tax reference. Payment to an agent or nominee requires form R38 or signed authority.

After a claim, HMRC uses deductions against overdue PAYE or Corporation Tax balances. Any remainder can be refunded or used for VAT or upcoming Corporation Tax bills. For upcoming Corporation Tax, identify the accounting period; for VAT, provide the registration number and amount to pay. HMRC checks claims against its records and the contractor's information and may request further evidence if they do not match.

HMRC says it will usually respond within eight weeks. If it contacts a company about a tax debt the company intends to pay using CIS deductions, it may be able to pause the debt; the company should contact Employers: general enquiries. Online amendments use the claim form again with corrected details; postal amendments need the new overpayment amount and details of the previous claim, with CIS on the envelope.

The procedural requirements are set out in HMRC's guidance, Claim a refund of Construction Industry Scheme deductions as a limited company.