How to Claim Back CIS Suffered as a Limited Company

How to Claim Back CIS Suffered as a Limited Company

If you run a limited company and carry out construction work as a subcontractor, you’ve probably had tax deducted from your payments under the Construction Industry Scheme (CIS). This deduction is known as CIS suffered, and it often results in overpaid tax unless you claim it back correctly.

Unlike sole traders, limited companies do not reclaim CIS deductions through Self Assessment. Instead, the refund process is linked to your company’s PAYE scheme. In this guide, we explain how to claim back CIS suffered as a limited company, how to report deductions to HMRC, and what to do if your refund is delayed.

What Is CIS Suffered?

When your limited company works as a subcontractor, contractors may deduct 20 per cent or 30 per cent from your invoices before paying you. This deduction is then passed to HMRC on your behalf and recorded under your company’s tax record.

These deductions are treated as advance payments toward your company’s tax liabilities, and can be offset against:

• PAYE tax due from your employees

• Employer’s National Insurance contributions

• Construction Industry Scheme deductions your company has made from others (if you are also a contractor)

If the total CIS suffered exceeds your PAYE liabilities, you can claim a refund.

Step-by-Step: How to Claim Back CIS Suffered as a Limited Company

Step 1: Register for PAYE

To claim back CIS suffered, your limited company must be registered as an employer with HMRC, even if you only pay yourself as a director. This gives you access to RTI (Real Time Information) submissions, which are essential for reporting and reclaiming deductions.

If you have not yet registered, you can do so online through the HMRC website.

Step 2: Record CIS Suffered in Your Payroll Software

Each month, when submitting your payroll information to HMRC, you must report any CIS tax that has been deducted from your company’s income.

You do this by:

• Including CIS suffered in your Employer Payment Summary (EPS)

• Submitting this alongside your monthly Full Payment Submission (FPS)

Your payroll software should have a section specifically for entering CIS deductions suffered. Make sure you enter the amounts accurately for each tax month.

This lets HMRC reduce your PAYE liabilities accordingly.

Step 3: Offset Deductions Against PAYE Liabilities

Once the CIS suffered is recorded in your EPS, it reduces your total PAYE bill.

For example:

• Your monthly PAYE liability is £2,000

• You suffered £1,500 in CIS deductions

• You only need to pay £500 to HMRC that month

Always cross-check figures before making payment to avoid overpaying.

What If CIS Deductions Exceed PAYE Liabilities?

If the total CIS suffered exceeds your company’s total PAYE and National Insurance liability for the year, you can claim a refund from HMRC.

This is done after the end of the tax year (5 April) once all EPS submissions are complete. To request a refund:

1. Submit your final FPS and EPS for the tax year

2. Contact HMRC’s Employer Helpline (0300 200 3200) or submit a request online via your Business Tax Account

3. Provide:

• Your PAYE reference

• Company name and registration number

• Amount of CIS suffered

• Confirmation that all PAYE liabilities are up to date

HMRC may ask for supporting evidence, such as monthly CIS deduction statements received from contractors.

Once approved, the refund is paid directly into your business bank account.

How Long Does It Take to Receive a Refund?

If your PAYE account is in order and all submissions are accurate, refunds are usually processed within 4 to 8 weeks. However, delays can occur if:

• You submit incorrect or incomplete figures

• Your EPS is not submitted properly

• HMRC requests additional documentation

To avoid delays, double-check your CIS deductions match the payment and deduction statements issued by your contractors.

Common Mistakes to Avoid

• Failing to register for PAYE: Without a PAYE scheme, you cannot report CIS suffered or claim it back

• Not submitting an EPS: This is essential for reporting CIS suffered

• Claiming via Self Assessment: Limited companies cannot claim CIS refunds through personal tax returns

• Overlooking paperwork: Keep all contractor-issued CIS statements as evidence

• Waiting too long: Refunds can only be issued once the tax year ends, but accurate monthly reporting will speed things up

Final Thoughts

Claiming back CIS suffered as a limited company requires proper PAYE registration, accurate monthly reporting, and prompt end-of-year submissions. When done correctly, you can offset the CIS deductions against your payroll liabilities or receive a refund if you’ve overpaid.

Managing the CIS refund process efficiently helps maintain cash flow and ensures your company is not paying more tax than necessary. If you are unsure, consider using a qualified accountant or payroll provider who is experienced with CIS and PAYE processes.