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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: CIS: in-year and end-of-year process: overpayments

Contractor advises you that he has overpaid or you identify an overpayment on ETMP

If CIS monthly returns or P35/FPSs are outstanding:

  • remind the contractor of his obligation to submit these
  • emphasise that the overpayment cannot be dealt with until all returns have been received.

If all returns have been received and the contractor advises you that our records are incorrect and a correction is required:

  • ask the contractor to ring the CIS Helpline on 0300 200 3210
  • advise the contractor that once all CIS returns and P35/FPSs (if necessary) have been received and if the correction creates an overpayment the overpayment will be dealt with as below.

Follow existing guidance regarding overpayments due to excess payments/EPS credits

If the overpayment is due to CIS deductions suffered by a limited company any excess CIS deductions will be carried forward each month until the end of the tax year. Any excess CIS deductions suffered remaining at the end of the tax year can be claimed as a repayment or reallocated if the:

  • final RTI return has been submitted
  • company has paid all PAYE/CIS amounts due to HMRC for the year.

There will be, however, some cases with CIS credit that has been locked and a PAYE/CIS charge outstanding within the same tax year.

Where you identify that credit for CIS deductions has been locked and there is a debt outstanding within the same tax year you should review notes on ETMP to ensure that there is no action being taken regarding the CIS overpayment by PT Ops and that it has not already been actioned by another DM office. If PT Ops are already involved in the case, then do not use the credit.

Where there is no evidence of PT Ops or DM activity:

  • unlock the credit in set/unset locks – see the Setting and unsetting locks (PDF 868kb) ETMP helpcard
  • allocate the CIS credit to the outstanding PAYE/CIS charges – see ETMP Helpcard 12 Allocate a Payment to a Charge (public folder)
  • lock any excess CIS credit using clearing lock ‘C’ - see the Setting and unsetting locks (PDF 868kb) ETMP helpcard
  • make a clear note on ETMP and IDMS of the actions taken.

Under no circumstances should any CIS credit be allocated outside of the tax year it is intended for. Any excess credits will need to be verified by PT Operations who will arrange any necessary reallocations across tax years, allocation to the AMC account or to other HODs.

If you are in contact with the employer and they want the credit to be reallocated or request repayment they should be instructed to put the request in writing to the following address.

NIC&EO
HM Revenue and Customs
BX9 1BX

If you receive a letter from the customer requesting reallocation or repayment of this credit, forward the letter to:

Customer Operations Employer Office
BP4102
Chillingham House
Benton Park View
Newcastle
NE98 1ZZ

If you have an underpayment and are unable to contact the customer or the customer does not contact PT Ops to request the reallocation, then check CISR to see if credit is available:

Enter the employer’s COTAX UTR and select the subcontractor option.

  • click on ‘View Customer’
  • click on the ‘Designatory Details’ button at the bottom of the screen
  • click on the ‘Payment details’ tab at the top
  • ensure you have the correct period entered for the year of the credit (06/04/xx – 05/04/xx) and click ‘filter’
  • the’ total deducted’ line will give you the figure deducted from the employer.

If:

  • extra credit is available (in other words, the full amount shown on CISR has not already been used to clear existing charges) send an eForm to ‘NICEO PAYEmp CIS’ asking them to verify the CIS credit and advising where it needs reallocation to
  • no extra credit is available, ensure IDMS is noted fully and pursue the underpayment.

Noting the record

On IDMS:

  • use RECORD ACTIONS to record for example Tele Call/Correspondence/Clerical
  • select Other
  • make a Further information note
  • set a new B/F date for 30 days later.

Unable to reconcile overpayment and EOY details

If you are unable to reconcile overpayment figures with the contractor:

  • make sure that all returns have been received
  • compare EOY figures
  • check individual effective returns month by month to identify the discrepancy.

If you are still unable to identify the discrepancy:

  • ask the contractor to write to the following address supplying details of their returns and overpayment:

National Insurance Contributions and Employers Office
HM Revenue and Customs
BX9 1BX
United Kingdom

  • send an eForm to ‘NICEO PAYEmp CIS’.