Ltd Co 30% CIS deductions

JodieRJodieR Experienced MentorRegistered Posts: 1,002
I've included the amount of CIS deducted (at 30%) from my client's sales invoice in box 30 on his P35 but I can't see that being enough for HMRC to verify the amount as correct - does anyone know how I let them know the reference numbers on the CIS voucher from the customer?

Comments

  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    You shouldn't need to as the contractor will have sent in a monthly report with that information on that this should be allocated directly to your client's tax account - in theory.
  • groundygroundy Trusted Regular Registered Posts: 495
    You need to write to HMRC to request the refund. You then need to wait about three months before contacting the CIS helpline to enquire about the refund who will then email the back office in Newcastle (as they dont have a phone number) who will then call you back in 5 working days (if your lucky). They will then inform you that they will write to you. A few weeks later you will receive a letter stating that you must cross reference all PDS to bank statements and list the deductions in a schedule, failure to cross reference to bank statements (doing their job for them) will lead to them returning your claim.

    By this time CT will be due but your client will be waiting on their refund to afford to pay their CT, you will contact CT to inform them of the refund due who will then tell you thats a different department and not their problem. Next you will receive a letter from CT demanding payment or legal proceedings will commence. Eventually you will convince them to hold of any action while the refund is processed. After a few more months of chasing the refund you will receive a letter telling you the refund has been agreed but you have been selected for security checks which holds up the refund a few more weeks for no apparent reason. Eventually you receive the refund, pay the CT plus interest and then have to write to CT to recover interest charged.

    All this work will be free as your client will be fed up of waiting on the refund and HMRC refuse to acknowledge you are doing their job for them.

    But remember tax doesnt have to be taxing

    Rant over and good luck
  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    Unfortunately that has been my experience too! Although I did get the CIS office to agree to offset the CT for us which saved it coming back and then having to clear before going out again!! And because the CT office was kept informed they didn't levy penalties or interest on the late CT payment.

    Small light at the end of a very long tunnel!!
  • ademooreademoore Well-Known Registered Posts: 146
    groundy wrote: »
    You need to write to HMRC to request the refund. You then need to wait about three months before contacting the CIS helpline to enquire about the refund who will then email the back office in Newcastle (as they dont have a phone number) who will then call you back in 5 working days (if your lucky). They will then inform you that they will write to you. A few weeks later you will receive a letter stating that you must cross reference all PDS to bank statements and list the deductions in a schedule, failure to cross reference to bank statements (doing their job for them) will lead to them returning your claim.

    By this time CT will be due but your client will be waiting on their refund to afford to pay their CT, you will contact CT to inform them of the refund due who will then tell you thats a different department and not their problem. Next you will receive a letter from CT demanding payment or legal proceedings will commence. Eventually you will convince them to hold of any action while the refund is processed. After a few more months of chasing the refund you will receive a letter telling you the refund has been agreed but you have been selected for security checks which holds up the refund a few more weeks for no apparent reason. Eventually you receive the refund, pay the CT plus interest and then have to write to CT to recover interest charged.

    All this work will be free as your client will be fed up of waiting on the refund and HMRC refuse to acknowledge you are doing their job for them.

    But remember tax doesnt have to be taxing

    Rant over and good luck

    LOL!!! You have to laugh or you just want to cry!
  • PAMDILLPAMDILL Experienced Mentor Registered Posts: 715
    If they have employees just deduct it off the next PAYE payment.
  • burgburg Experienced Mentor GloucesterModerator, FMAAT, AAT Licensed Accountant Posts: 1,440
    groundy wrote: »
    You need to write to HMRC to request the refund. You then need to wait about three months before contacting the CIS helpline to enquire about the refund who will then email the back office in Newcastle (as they dont have a phone number) who will then call you back in 5 working days (if your lucky). They will then inform you that they will write to you. A few weeks later you will receive a letter stating that you must cross reference all PDS to bank statements and list the deductions in a schedule, failure to cross reference to bank statements (doing their job for them) will lead to them returning your claim.!

    By this time CT will be due but your client will be waiting on their refund to afford to pay their CT, you will contact CT to inform them of the refund due who will then tell you thats a different department and not their problem. Next you will receive a letter from CT demanding payment or legal proceedings will commence. Eventually you will convince them to hold of any action while the refund is processed. After a few more months of chasing the refund you will receive a letter telling you the refund has been agreed but you have been selected for security checks which holds up the refund a few more weeks for no apparent reason. Eventually you receive the refund, pay the CT plus interest and then have to write to CT to recover interest charged.

    All this work will be free as your client will be fed up of waiting on the refund and HMRC refuse to acknowledge you are doing their job for them.

    But remember tax doesnt have to be taxing

    Rant over and good luck

    Really could not have put it better myself. So sad but so true
    Regards,

    Burg
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    Agreed... I wrote a letter for a Ltd subbie only to be told they aren't registered!!!! Yet they are having 20% deductions not 30%.... I am not looking forward to seeing how long it takes me to resolve this one....!! CIS is such a learning curve for me.
  • T.C.T.C. Experienced Mentor Registered, Tutor Posts: 1,448
    It is worth remembering that it is up to the contractor to verify the subbie and they are then told what percentage to take. If 20% is being taken, what are they doing with it if the subbie is not on the CIS subcontractor list?
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    T.C. wrote: »
    It is worth remembering that it is up to the contractor to verify the subbie and they are then told what percentage to take. If 20% is being taken, what are they doing with it if the subbie is not on the CIS subcontractor list?

    I know! I'm guessing they are using the Ltd Co's previous sole trader subbie reference. I don't have any reason to believe the contractor is dodgy.
  • groundygroundy Trusted Regular Registered Posts: 495
    Monsoon wrote: »
    I know! I'm guessing they are using the Ltd Co's previous sole trader subbie reference. I don't have any reason to believe the contractor is dodgy.

    Monsoon

    If they are using the previous ST UTR you are in for a fun time. Even if the work was invoiced by Ltd and paid into Ltd bank account, HMRC will argue it is ST income and should go on SA, therefore you need to ensure the contractor has and uses the correct UTR.
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    groundy wrote: »
    Monsoon

    If they are using the previous ST UTR you are in for a fun time. Even if the work was invoiced by Ltd and paid into Ltd bank account, HMRC will argue it is ST income and should go on SA, therefore you need to ensure the contractor has and uses the correct UTR.

    I know :( What fun this is!
  • JodieRJodieR Experienced Mentor Registered Posts: 1,002
    looks like i'm in for a fun time with this!

    Pamdill: Yes he does have employees but as one of them was off on paternity leave and then went on the sick for 4 months he was due a refund from HMRC before the CIS was even an issue

    Luckily the amount isn't that large and the client is so laid back so i'm not stressing about it. the client now meets the conditions for registering to receive their payments gross (he wanted to wait for this before registering for CIS, hence the 30% deduction previously) and when i filled out the application form it asked if he'd been given any verification numbers by contractors so I've included it there and MAYBE that will be the confirmation they need to process the P35?? I have my overly-optimistic head on today!
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