Understanding CIS Repayment Claims for Companies
CIS repayment claims for companies can improve cash flow and reduce delays caused by CIS deductions. Companies working under the Construction Industry Scheme (CIS) can apply for gross payment status, which allows contractors to pay them without deductions being taken at source. Understanding HMRC requirements and repayment procedures helps businesses submit accurate claims and avoid unnecessary delays.
Prepare Before Making a Claim
Before submitting a claim, make sure company records are accurate and up to date. If you use a tax adviser, complete form 64-8 so they can manage CIS and PAYE matters on behalf of the company. Newly incorporated businesses should also provide contractors with the company’s Unique Taxpayer Reference.
Check all PAYE submissions carefully because reporting errors often delay claims. Companies cannot reclaim CIS deductions through a Corporation Tax return.
Meet Contractor Responsibilities
If your company also acts as a contractor, submit all CIS300 monthly returns before making a claim. HMRC will not process repayments until reporting obligations have been completed.
Submit a CIS Repayment Claim
After filing the final Employer Payment Summary and all Full Payment Submissions for the tax year, submit a written CIS repayment claim. Clearly explain the reason for the overpayment and include bank details if you prefer payment by bank transfer.
Always include the full company name and PAYE reference. HMRC may later request supporting documents, although you do not usually need to provide them with the initial claim.
What to Expect from HMRC
HMRC usually processes CIS repayment claims within 25 working days when the figures match its records. If discrepancies appear, HMRC may contact the company or its agent for clarification. In some cases, HMRC issues part of the repayment while reviewing the remaining balance.
Receive Repayments by Bank Transfer
HMRC can often send repayments directly to a bank account. Include the PAYE reference, company name, account number, sort code and account holder’s name when submitting the claim. If repayment will be made to a third party, written authorisation is required.
Electronic payments may not always be available, especially where PAYE reporting has not been completed in real time.
Offset Against Other Liabilities
Companies can ask HMRC to offset a CIS repayment against other liabilities, including Corporation Tax, VAT or balances included in a Time to Pay arrangement.
Provide all relevant references and accounting periods so HMRC can allocate payments correctly.
Keep Accurate Records
Contractors must provide payment and deduction statements, usually within two weeks of the end of each tax month. Companies should check and retain these records because they support CIS repayment claims.
If a contractor does not provide a statement, contact them promptly. Businesses can still submit claims using alternative evidence where necessary.
Correct or Revise a Claim
If the company underclaims an amount, it can submit a revised claim and refer to the original submission.
When HMRC disputes figures, it may request a breakdown of payments and deductions along with supporting evidence such as bank statements.
Changes in Business Structure
Businesses cannot transfer CIS deductions between different business structures. Amounts relating to periods as a sole trader or partnership must be claimed through Self-Assessment rather than through the company.
Avoid Delays and Discrepancies
If HMRC cannot fully verify a claim, it may initially repay only the agreed amount. The remaining balance will usually be processed once sufficient supporting evidence has been provided. Accurate record keeping throughout the year helps minimise delays and discrepancies.
Further Help and Guidance
For more information about CIS obligations and repayments, visit GOV.UK guidance. HMRC also provides support for employers, contractors and agents, or you can contact the team for further advice.