Majority of the clients I'm now working with are CIS registered Limited companies working through agencies, unfortunately I'm not that experienced with CIS..
Would someone mind explaining the process, when CIS is deducted, when it's reclaimable, and how HMRC will deal with this?
If you need any more information I'm happy to try explain the situation.
I would suggest that you read the HMRC CIS guide first and seek help on anything that you are not clear about.
You need to understand the verification system and the 3 different deduction rates-zero as in gross status, 20% or 30%.
Returns, including nil returns need filing within 14 days of month end or £100 fine is automatically incurred.
You need to be clear as to who is verifying contractors and sub contractors,who is establishing employed or self employed status.
From April all returns must be filed on line.
There are quite a few other important points to learn and while not trying to put you off it is a potential problem area if you do not have enough knowledge and good systems in place to collect the necessary information in good time to be able to submit accurate returns.
As Gordon says, the sub contractor will need to be verified, and you will be given the rates as per Gordon's post.
The contractor will pay the subcontractor after deducting the CIS (eg amount due £1000 will be paid as £800 if the 20% rate. In the case of Sole Traders this will be repaid after the tax year on the self assessment form. For Ltd Co's they can apply to be repaid after the tax year by writing to the PAYE employer Office.
This is well worth a read https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/377354/claimrepayments.pdf
Another thing to consider is CIS suffered . If the Ltd Co also operates a PAYE scheme, it can offset the PAYE tax and NI against any CIS paid.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
