CIS Levy payments

Lucy_M
Lucy_M Registered Posts: 136 ? ? ?
Hi,
I am looking for some advice please...
I have a friend who I am helping to sort out her partners tax affairs, he is CIS registered but his employer has been deducting a contribution towards the levy scheme from his payments. From the information I have read this is not allowed (in-fact HMRC's PDF recommends seeking legal advice..!) I would really like to confirm this before I mention it to them, obviously. He has not completed a tax return for 4 years, will HMRC honour re-funding of over-payments this far back?
Thank you so much, in advance, for any help!

Best regards,
Lucy

Comments

  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    I love CIS ! Not sure of your question, but if a contractor (not employer) has been deducting CIS tax from his earnings, then he should have been filing self-assessment tax returns as a self-employed subbie. If he is not registered as self-employed, then he could have problems. He needs to get this sorted asap.
  • Lucy_M
    Lucy_M Registered Posts: 136 ? ? ?
    Thanks T.C sorry if my post is confusing, he's a subbie, his payment remittance from his contractor shows a levy contribution deduction at, if my memory serves me right, about £0.0015 % of earnings, is this allowable? He is registered as self employed, just hasn't sent a return in, we are on the case to get it done asap! Thanks :)
  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    What do you mean by a levy contribution? Levy on what to whom? If you mean a training levy, then yes, this is usual, and an expense.
  • Lucy_M
    Lucy_M Registered Posts: 136 ? ? ?
    It does say 'training levy contribution' now I think about it but the pdf regarding the CIS treining levy scheme states that sub-contractors shouldn't have to pay anything? If it's usual though then I guess I won't mention it... Thank you for taking the time to reply! Lucy
  • Lucy_M
    Lucy_M Registered Posts: 136 ? ? ?
    It does say 'training levy contribution' now I think about it but the pdf regarding the CIS treining levy scheme states that sub-contractors shouldn't have to pay anything? If it's usual though then I guess I won't mention it... Thank you for taking the time to reply! Lucy
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    TC I'm fairly certain the legislation has changed and that the levy cannot be passed on to subbies unless it was agreed by the subbie in writing. I may be wrong though!
  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    I don't think subbies HAVE to pay, but most agree because it is a small amount and it keeps the contractor happy. After all the subbie wants the work from the contractor and this is a very small price to pay. It is an allowable expense though.
  • Lucy_M
    Lucy_M Registered Posts: 136 ? ? ?
    That sounds about right, thanks both of you! So do you mean it can be claimed on his tax return as an allowable expense? In which case it is a bit of a mute point I guess...
    Really appreciate the time xx
  • Gem7321
    Gem7321 MAAT, AAT Licensed Accountant Posts: 1,438
    Just for info HMRC have recently released this statement http://www.hmrc.gov.uk/cis/citb-note2-mar14.htm
  • Lucy_M
    Lucy_M Registered Posts: 136 ? ? ?
    Thanks Gem7321!
    Does confirm that the levy should not be passed on but as T.C. said, it's difficult to avoid if the subbies want the work...
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