Claiming repayments for old tax returns

Hi guys,

This is one of those 'not as simple as it looks' ones (or it is to me, anyway).

A client (new one) has just walked through the door saying he's been self-employed in the CIS shceme since 1996, and has never submitted a tax return; HMRC didn't ask for one and he was scared about rocking the boat.

Given that he's a CIS subcontractor, he'll be due a repayment (his earnings were never more than £30k) for each of the 16 (!) years that he has a return outstanding for. Now, I know that HMRC's rules say that you must claim an overpayment within 4 years, but the detail on that guidance explains that it applies where you're amending the tax return.

Given that this guy never submitted any returns in the first place, does anyone know where we stand on being able to claim repayments?

Thanks guys,

Mike.

Comments

  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Hmm, interesting one!

    I would start with the premise that a tax return is due the later of the normal due date, or 3 months after the return is issued. In your guy's case, that would give a deadline of this year, assuming he tells them now.

    Thus, you can file the returns and - presumably - claim repayments as usual.

    I honestly don't know what will happen, but I am pretty sure you're looking at a failure to notify type issue as opposed to a late tax return issue where, if out of time, you couldn't submit. Saying that, though, will they issue an old TR if it would otherwise be out of time?

    Interesting.
  • jamesm96
    jamesm96 Registered Posts: 523
    Monsoon wrote: »
    a failure to notify type issue

    Yeah that's what I thought at first (because there'll be repayments we'd be able to appeal any late return penalties). But, he's in the CIS scheme, so he did notify them, his contractors wouldn't be able to pay him otherwise!

    It's very odd. Especially because HMRC must have an account for this guy, to which they're allocating the payments from his contractors. I keep thinking of different scenarios and always keep coming back to the fact that he is registered as a CIS subcontractor; I can't understand (with all their monthly returns and verifications and annual returns) how this guys could have possibly slipped through the net!
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    jamesm96 wrote: »
    Yeah that's what I thought at first (because there'll be repayments we'd be able to appeal any late return penalties). But, he's in the CIS scheme, so he did notify them, his contractors wouldn't be able to pay him otherwise!

    It's very odd. Especially because HMRC must have an account for this guy, to which they're allocating the payments from his contractors. I keep thinking of different scenarios and always keep coming back to the fact that he is registered as a CIS subcontractor; I can't understand (with all their monthly returns and verifications and annual returns) how this guys could have possibly slipped through the net!

    That is a very good point.

    Curiouser and Curiouser.

    Please do let us know what happens!
  • stevo5678
    stevo5678 Registered Posts: 325
    Id be amazed if they let you go back more than 4 years.

    Defintely not if he doesnt have his records as hmrc dont hold cis details to provide externally after around 5 years.

    I think he may of missed the boat on that one.
  • jamesm96
    jamesm96 Registered Posts: 523
    stevo5678 wrote: »
    Id be amazed if they let you go back more than 4 years.

    Defintely not if he doesnt have his records as hmrc dont hold cis details to provide externally after around 5 years.

    I think he may of missed the boat on that one.

    Yeah I think that's kinda what I'm expecting. But then, they're also not going to let him just not do those tax returns. And, like Monsoon said, HMRC haven't issued the tax returns either so, technically, they're not late!
  • stevo5678
    stevo5678 Registered Posts: 325
    Agreed, worth a try by all means.
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    If you don't ask, you don't get..
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