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Putting the pressure on a contractor

Putting the pressure on a contractor

A client (a small general builder) who does not fall under CIS, was short paid by a contractor (by about £2500) who told him that he would account directly to HMRC for the amount deducted - I have no idea how he intended to achieve this!. No great surprise - no payment made either to HMRC or subsequently to my client. Apart from the obvious small claims route, are there any effective threats that can be made that might result in extracting the balance? My client is pretty clean, but I suspect that the contractor would not welcome unwanted attention from HMRC.

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By twj4789
31st Jul 2012 15:50

Unlikely HMRC would be interested

Unless the contractor has it in writing that he would account to HMRC it is unlikely they will be interested, if they are interested they will take action regardless of whether your client has been paid. If it is in writing you probably have a duty to report it regardless. 

There are some cheap online solicitors that knock our standard letters for a few pounts - there are a lot on google. I have used them before and sometimes just a solicitors name prompts a payment.  

If you go through the small claims route make sure your client has tried to contact and mediate with the debtor to avoid court action otherwise it will just lead to delays in proceedings later on.

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31st Jul 2012 17:36

I don't understand

If a builder has worked for a contractor, how does he not fall under CIS?

Out of curiosity, what % of the total invoice is the £2,500? If it is 30% then it could well change things.

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01st Aug 2012 09:21

If the contractor is a limited company serve a Statutory Demand. If there is no dispute that the money is owed it has the very nasty effect that a winding up petition can be presented after a 3 week period if the money hasn't been paid or the Demand struck out

Tends to concentrate minds quicker than the Small Claims court

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01st Aug 2012 12:30

Are you sure the works didn't fall nder CIS

I'd check this,out first. Quite a number of small contractors don't want to be in CIS but it's not a choice. That being said there should have been a CIS deduction certificate issued with the payment detailing the CIS deduction. This can be used to reclaim the tax.

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