Poodle Registered Posts: 711 Epic contributor 🐘

I have two clients(both subbies)who were trading as sole traders at the start of this tax year, then went into partnership, and now have gone back to sole traders:mad2:

The problem that I have is that they have not been too clever in supplying UTR numbers to conractors for CIS deductions, basically picking any one of the three numbers and not thinking to link the work being carried out to the entity carrying it out:mad2:

I am able to calculate the tax liabilities but what I need to know is, do I have to make the revenue aware of what has happened or (and they are both still mates), get one to pay off the other with any imbalance of tax suffered next April?

Would there be a tax implication with this on the 'mate' receiving a payment?



    PAMDILL Registered Posts: 721 Epic contributor 🐘
    I have had it from the other end where being a contractor partnerships forget to tell you they are partnerships and just give you the one number (their own) this then means they are verified as being unmatched and occur 30% deductions.

    I asked the Inland Revenue about this when one of the partnerships complained about the amount of tax being deducted and they told me to have the partnership contact them and they would be told to make sure and provide contrators with their partnership UTR and their own and then the difference would besorted out once they sent bac their tax returns.

    I would assume that your subbied would have invoiced the contractors with partnership invoices for the work carried out when they were in a partnership. In which case there would be records to substantiate the partnership income and deductions and any payment made to just one of them which did not go through the partnership would be treated as drawings.

    I would check though on what name is shown on the subcontractor monthly statement as that is the name the Inland Revenue would have allocated the deductions to.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    What a mess!

    One of many reasons I never do subbies!!

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