Construction Industry Scheme: repayment claims for limited company subcontractors

If you are a limited company acting as a subcontractor and have had deductions taken from your Construction Industry Scheme (CIS) payments and want to reclaim them, there is now an electronic form available to make your claim. You no longer need to write in or call the helpline to make your claim.  Login via your gateway.

Once you have filed your company’s final Employer Payment Summary (EPS) and all associated Full Payment Submissions (FPS) for the tax year, complete the electronic form providing all of the information requested.

You do not have to send in any documents to support your claim. However please note; if the repayment is to be sent to your agent or a nominee you will not be able to use the online claim form, you will need to send the claim and a signed form R38 to the following address:

National Insurance Contributions and Employer Office

HM Revenue & Customs

BX9 1BX

P11D and P11D(b) Filing and Payment Deadlines

Don’t forget that you need to tell HMRC about any Class 1A National Insurance contributions (NICs) that you owe for the tax year ending 5 April 2017 by 6 July 2017 at the latest. You also need to send us any P11D forms due by 6 July.

Please remember it’s important that you complete your forms P11D correctly the first time. If you make a mistake, it’s time-consuming to correct it and your employees will pay the wrong tax in the meantime.

There are a number of live and pre-recorded webinars being run throughout June covering expenses and benefits, and filing forms P11D and P11D(b). Full guidance is also available.

Here are some common questions, and mistakes to avoid.

What do I need to file?

If you paid any benefits and/or non-exempt expenses, you need to file a P11D(b). Include the total benefits liable to Class 1A NICs, even if you taxed some or all of them through your employees’ pay.

You need to send a P11D for each employee in receipt of benefits and/or non-exempt expenses, unless you registered with HMRC online before 6 April 2016 to tax them through the payroll. If you didn’t register online but then went on to tax some or all benefits through your payroll, you still have to send a P11D form, but mark clearly on each one, which benefits have been taxed through the payroll already.

If you haven’t already registered online to payroll your company benefits, you may wish to do so now ahead of the 2018-2019 tax year. It’ll mean you no longer need to send P11Ds, as long as you can payroll all your benefits. Please note that if you are taxing benefits through the payroll and haven’t registered online to do so, you need HMRC’s agreement each year to continue using this method. HMRC normally only agree that you can do this in exceptional circumstances.

I didn’t pay any expenses or benefits. Do I need to tell you if I don’t need to file a P11D/P11D(b)?

You only need to tell HMRC that you don’t need to make a return if HMRC sent you a paper P11D(b), an electronic notice to file a P11D(b) or a reminder letter. You can tell HMRC here.

How can I be sure I’ve filled everything in correctly?

There are free, online toolkits which you can use to help avoid mistakes. Some common ones to watch out for are;

  • Please don’t put ‘6 April 2016’ in the start date and/or ‘5 April 2017’ in the end date for your company cars, unless they are genuinely the dates your employee received or returned a company car. If your employee already had the car before the start of the tax year, leave the ‘from’ box blank. If they kept the car into the new tax year, leave the ‘to’ box blank
  • Remember to sign the form P11D(b) if you’re sending a paper one
  • Only send one P11D(b) for each scheme, showing the total amount due, don’t send a separate one for employees and directors for example. We treat each separate P11D(b) as an amendment to any we’ve previously received
  • Check to see if you need to use the ‘adjustments’ at Section 4 before you complete box C. If you do need to make an adjustment, you need to leave box C blank
  • If you’ve given someone a beneficial loan, double-check that you’ve completed all parts of Section H.

Tax free childcare and tax credits is changing…

As you may know, employer childcare schemes will no longer be available to new applicants, from April 2018. In its place, HMRC have decided to introduce a new tax free childcare scheme, in conjunction with National Savings & Investments.

What is the government tax free childcare?

 The aim of this government initiative, is to help parents manage the mounting costs of childcare. If you are eligible for the scheme, for every £8 a parent pays into their childcare account, the government will top it up by £2.

At the moment, any working parents that have children, aged under 4 on 31st August 2017, can apply through the new digital childcare service for tax-free childcare. This is going to be extended over the course of the year, to include children up to the age of 11.

Things to know:

  • The maximum you can pay into the scheme is £10,000 per year, per child. It is ONE account per child, so if parents have separated, you need to reach a mutual agreement to go ahead with this option.
  • Unlike existing childcare vouchers, the scheme is open to all eligible workers, including the self-employed. Importantly, if you are self-employed, you AND your partner will need to be in work to qualify.
  • To qualify, you both need to earn a minimum of £120 per week and no more than £100,000 per year.
  • Warning: It’s important to note, you won’t be able to get the childcare element of working tax credit or universal credit if you’re signed up to the new Tax-Free Childcare scheme. If you open a childcare account, you will lose the childcare element of tax credit permanently.

What’s the alternative?

 There are 2 alternatives, however, these are not available to everyone:

 Employer supported childcare voucher scheme: this option is not available to the self-employed and is only accessible, if you employer operates a qualifying scheme.

  1. Childcare element of working tax credits or universal credits: The level of tax credit awarded, depends on a number of factors including, household income, number of children and weekly childcare cost. Please visit https://www.tax.service.gov.uk/tax-credits-calculator, for further details.

What should you do now?

Our first tip, is to check if you are entitled to the childcare element of working tax credits.

Secondly, check to see if  your employer or your partner’s employer, offer an Employer supported childcare voucher scheme.

If you are also the company director, you should consider setting up a childcare voucher scheme, as there may also be savings from an Employer’s point of view.

When it comes to childcare, you need to ensure you are choosing the best possible option for your situation. What suits your mate down the pub or the parent at the school gates, may not suit you. If your family circumstances change, you should re-assess your options.  Based on the reviews we have carried out so far, the best option is not always the obvious one.

This website provides a good starting point, when considering the choices available: https://www.childcarechoices.gov.uk/

If you feel it would be beneficial to have Courts Accountants conduct a review into your childcare options, please do not hesitate to contact a member of the team for further details.

Is it really you making the repayment claim?

The Abbey Tax Blog

HMRC appears to have stepped up the number of repayment security checks it undertakes, judging by an influx of letters we have recently seen.

Repayment claims are checked when a risk is activated which raises HMRC’s suspicion about the validity of a claim.

Here are some of the circumstances which may trigger a security check:

  • A claim is made where the taxpayer address differs from that shown on their self-assessment record.
  • Previous correspondence sent to the taxpayer address has been returned undelivered by the Post Office.
  • The taxpayer deceased signal is set on the self-assessment record.
  • The taxpayer is insolvent.
  • The repayment claim exceeds HMRC’s limits for automatic processing.

HMRC also stops repayments being made when certain signals are present on a taxpayer’s self-assessment record, such as the Budget Payment Plan or No Repayment signals. The Budget Payment Plan signal is self-explanatory, but the No Repayment signal is placed on…

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