Blogger
Share this content
0
5
1108

CIS refunds refused

I have a client who is a sub contractor who also has subccontractors working for him. He went limited from 1 April 2010 but had difficulty getting a bank account in the company's name although this has now been resolved. Although he was having CIS deducted he did not offset all of it against the CIS due on his men with the result that by the end of 2010/11 he had overpaid about 9K. This was put on the P35 but HMRC don't seem to take much notice of this form so a refund was requested. I got the usual reply about providing cross referenced deduction statements and bank statements etc. and I provided what I could, but some contractors paperwork is a little difficult to follow,but most tied up. HMRC's response is that as the bank account was not in the company's name the only way to get a refund is that I must amend all company accounts, corporation tax and VAT returns and resubmit the clients self-assessment tax return and gave me some HMRC internal guideline as to why. My subsequent reply requesting an appeal was fruity but quite constrained; am I being unreasonable and is there a way round this problem?

Replies

Please login or register to join the discussion.

13th May 2012 00:23

Yet another example

... of why companies should never trade through bank accounts in the personal name of a director/shareholder.

Yes - you are being unreasonable.  Why not just open a bank account in the company's name?  It would be quicker than appealing to HMRC.

Thanks (0)
avatar
14th May 2012 09:23

Because the banks refused to open an account in the company's name because of an historical problem the director had had. This has been resolved but it took a long time!

Thanks (0)
avatar
14th May 2012 09:43

Surely it is not unreasonable

Euan MacLennan wrote:

... of why companies should never trade through bank accounts in the personal name of a director/shareholder.

Yes - you are being unreasonable.  Why not just open a bank account in the company's name?  It would be quicker than appealing to HMRC.

Despite the decision being taken regarding he bank account (which is not exactly uncommon) the company has still overpaid and is entitled to the tax repayment. I am sure that HMRC must be on dodgy ground in refusing if all the other paperwork is present & correct.

Surely it would be even more incorrect to try and restate the whole mess as a sole trade when it is nothing of the sort.

 

Thanks (0)
avatar
14th May 2012 10:21

Would declaring the income as a sole trader work?

Are the CIS certificates showing the Ltd Co UTR? If this is the case would you not run into a  problem when you tried to claim it as self employed income and claimed the money back through the subbies tax return it wouldn't match the deductions for the self employed UTR held by HMRC.  

If it is in the Co UTR so I would appeal the decision on that basis irrespective of what bank account it went into. As accountants we know it should be in a Ltd Co bank account but we also know that banks can be reluctant opening accounts. I had an identical problem with a sub contractor whose Ltd bank account was closed by his bank at short notice, they sent him a cheque of the balance and asked for their stationery back so he had to use his personal bank account as a short term measure. His payments to his personal bank didn't match exactly because one company had produced the CIS certificates and then deducted overpayments or had repaid money - maximum of £100. I appealled and sent an explanation of each one of the the differences. I got a standard letter back saying the figures didn't match so I raised a complaint - on the basis that I had sent an explanation detailing the differences. The matter was finally sorted out and the subbie got his repayment 9 months after we first raised it but the final irony was that the complaint wasn't upheld because whoever dealt with the matter had followed all the correct procedures. So you will need to be persistent because the "system" doesn't allow the revenue officers to use common sense.

Just had a thought about the VAT you mention you've been told to change the VAT returns - would the client not then be in trouble with the VAT section?

Thanks (0)
avatar
14th May 2012 13:48

Thank you lesley.barnes. I've made these points to HMRC; Everthing was changed into the company's name, new tax and PAYE references etc. Most of the certificates use the company's UTR, there was one contractor who kept using the old one, and he went out of business. All I want is a little common sense but every letter to HMRC gets a reply from a different person and of course now the client has received demands from the Cumbernauld and a letter from the debt collection people. It would be nice if there was one person who would deal with the problem and communucate with all the HMRC 's different departments.

Thanks (0)