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Please help end my CIS headache

stefanborostefanboro Well-KnownRegistered Posts: 187
Hello fellow MIP's!

Right, so I have a client who is quite a large contractor for CIS.

They took on a guy who was working through his company who claimed to be a consultant and therefore not liable for CIS.

However, after looking at his situation (after falling out with the guy) my client, and I completely agree, have determined that he was in fact working as a site foreman and was always liable for CIS.

My client owe him two invoices totalling up to about £3,000.

My client wants to back date all of the CIS that should have been deducted throughout the current tax year and deduct it from the current invoices. As the guy's company is not registered for CIS he will be deducted 30%

I rang HMRC several times to see if this is allowed. Half of the advisors say yes, half so no, just deduct 30% for what is owed on the outstanding invoices.

How on earth do I proceed with this?

Any help would be mucho appreciated.


  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    I would just take from the current invoices and learn from the incident. You have put things right now and I don't think HMRC would question this further upon investigation.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,071
    You have good reason to think the "consultant" was not liable to CIS. Now you know he is, deduct 30% but I wouldn't worry about going backwards.

    Ringing HMRC for advice is often useless as you've discovered! Unless you can get it in writing, it's probably not worth the phone call (unless you get the same answer every time and even then they won't allow you to rely on it).
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    Totally agree Monsoon!
  • stefanborostefanboro Well-Known Registered Posts: 187
    Thanks guys genuinely appreciate it.

    Sadly I think my client will backdate the invoices just for spite. There is a lot of ugly relations in the contruction sector I am learning.
  • EmrhinoEmrhino Feels At Home Registered Posts: 39
    I have known a few contractors back date invoices in a similar fashion when they have realised later they should have deducted CIS but haven't.

    At the end of the day, your client is liable to pay over the tax to HMRC and they do put the onus on the contractor now to make sure they check the status of all subbies. At least if he does this and invoices the 'consultant' he is meeting his obligations.

    The problem will be getting the consultant to pay up I imagine.

    Good luck!
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