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CIS HMRC double dipping

A client has had to make a settlement for an earlier year for non decuction of CIS.

the subbie has already paid the tax due on these amounts in any event.

I seem to remember that HMRC can double dip / tax

is there any recourse at all for the contractor

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notification

notify hmrc, this would normally mean the contractor status has already been suspended unless all subbies are now authorised to recieve it GROSS.

 

when they reply advising you what action to take then deal with it as appropriately as you wish.

 

otherwise since the subby hasnt claimed it back you could do nothing. 

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Two avenues to explore...

Firstly an HMRC announcement following the Demibourne stating that...

A legislative proposal be introduced from 6 April 2008 to deal wth double taxation - this was in the context of CIS status issue cases (ie. CIS deducted from workers, reclaimed by them, then "employer" assessesd for PAYE giving an unfair result).  The legislation referred to (didn't state specific clauses) was: The Income Tax (Pay As You Easrn) Regulations 2003.  A report in October 2008 by Vantis referred to regulations 72E and 72F of these regulations.

Secondly...

HMRC guidance CISR83050, link stated below:

http://www.hmrc.gov.uk/manuals/cisrmanual/cisr83050.htm

The purpose of directions under Regulation 9(5) is to avoid the situation where HMRC pursues a contractor for a deduction that should have been made where the subcontractor has no liability, or has already met any tax liability, on the sum paid gross.

It follows the principle that HMRC should not recover more tax from both contractor and subcontractor than is correctly payable by the subcontractor. That is why the relief is sometimes known as 'double taxation' relief.

A request for a direction under Regulation 9(5) may be made at any time except where a Determination under regulation 13(2) has already been issued (see CISR83040). A direction under Regulation 9(5) may involve repayment if the contractor has already paid the amount of the deduction to HMRC. A direction under Regulation 9(5) also cannot later be made following the conclusion of an Employer Compliance settlement (see CISR83060).

 

 

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