TAXES

Paying Your Taxes and Claim Deductions

 

When you are registered with the CIS, it is still your responsibility to pay the correct National Insurance and taxes that apply to your business. Such is true even if deductions have been made by contractors on your behalf all year long.

You should receive a monthly statement from contractors detailing what you have been paid and the deductions they have made on your behalf.

Partners and Sole Traders

When the tax year has ended, complete and submit your Self-Assessment. The tax return should account for:

  • All income from your invoices
  • All deductions that contractors have made to CIS on your behalf

HMRC will determine your National Insurance and tax bill and subtract any deductions made on your behalf by contractors.

Should you still owe taxes afterward, you must pay them by 31 January that comes after the year-end.

Limited Companies

Should you have gross payment status, you will want to declare your income in the Corporation Tax return.

If you have paid CIS deductions, then you must reclaim these through your company payroll scheme. You may be penalized if you try to claim them back under the Corporation Tax return.

Be sure to send all monthly Full Payment Submission (FPS) to HMRC as usual. As well, send the Employer Payment Summary.

Be sure that you keep all your records. You may use form CIS132 to do this.

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