CIS Tax return

dantray

Hi,

I have been asked to help a friend with his self assessment. He is CIS registered but claims not to have been given any statements showing CIS deductions over the year.

I've told him to get a statement from his contractor for the year but doubt he'll get it for a few weeks as he works away and it's getting pretty close to the wire.

Is it acceptable practice to work out deductions from net pay received into bank account, assuming that all funds received relate to work and no additional expenses etc (which i'm waiting for him to confirm there aren't).

help appreciated,

thanks
dan.

T.C.

The contractor has an obligation to provide CIS monthly statements and is liable to substantial fines if he does not do so. Check our the HMRC website for details and I would suggest a strong letter to the contractor to get these statements. You cannot "guess" the deductions without proof of these - afterall there is no guarantee that the contractor has been sending the tax to HMRC!!!

groundy

Dantray

In the abscence of any CIS statements, all you can do is work out the tax deducted based on what has been paid each week.

However, if the contractor has not been paying the CIS over to HMRC, your client will need to produce bank statements cross referenced to sales invoices to prove the tax has been deducted. At which point HMRC will open comunications with the contractor.

I would not take it upon myself to write to the contractor as you have no relationship with them and you could cause problems for your client and their working relationship. I would however suggest that you remind your client that he must ensure he receives his CIS statements each month and explain the possible complications if he doesn't.

Hope this helps

TC

It doesnt matter if the contractor hasn't paid the tax to HMRC as long as the subbie can prove the deduction has taken place.

Monsoon

I have successfully written to contractors (with my subbie client's consent) to get the copy statements, so if the subbie doesn't mind, it's worth a shot. Sometimes it works and sometimes it doesn't.

In the absence of deduction statements, if you can reasonably calculate the tax then do (but consider disclosing in white space, including that you have tried to get the statements from the contractor but he won't give them).

In the absence of statements as long as you can demonstrate you've tried to get the documentation from the contractor, then you can write to HMRC CIS at the Carnbane address and they will (eventually) provide copies of what's been submitted on the CIS returns.

dantray

hi,

thanks for all your responses and advice. I'm currently trying to get the information from the contractor who is dragging his heelsa bit.

This gets better - my mate has no P45 to cover the part of the year he was in employment. the company he worked for has since liquidized so unfortunately cannot contact them.

I have told him to write to the local tax office to see if there's anything they can do. but now less than a week away not much chance of getting them to act.

what would be the best course of action in this circumstance? he was self employed from oct 09 and taxable profits are roughly £4,500, if that makes a difference. He earned quite a bit in employment so can safely say that allowances have already been used up.

This was only supposed to be a favour - I probably should have just fixed my boiler myself!

thanks again.

dan.

Bluewednesday

Pay whatever tax you think is due, overpay a bit to be sure.

Then file the return as soon as you can, the late filing penalty is restricted to the amount owed at the end of January so if it's paid off - no penalty.

Beware that this concession is being removed (although I'm not sure when as they keep changing their minds) so it's not something you can use each year.

dantray

i don't think there will be liability to pay - if anything he should be due a rebate in CIS.

that's pretty much sorted now, the only thing missing is the P45. doesn't look like he'll be able to get hold of it in time though.

last question, i promise:

is it acceptable to submit the self assessment with just the self employed income on, then send an amendment in afterwards taking into account PAYE income?

cheers everyone.

dan

Monsoon

Yeah as long as you state on the return it's estimated figures. I'd disclose in white space also.

MoneySavingBank

His Last Payslip

dantray wrote: »

hi,

This gets better - my mate has no P45 to cover the part of the year he was in employment. the company he worked for has since liquidized so unfortunately cannot contact them.

What about his Last payslip? If he has last payslip you can find all the Numbers there....

Ta