On 18 April 2007 I submitted an application for my client (a limited company) to change from having tax deducted to receiving payments Gross. After many weeks chasing the application, the application has ben rejected. The grounds stated being " Corporation Tax payments and interest due for the accounting period ended 31/7/2005 were paid late. (they were due 30/4/2006 but were paid 14/7/2006).
Can any one advise me if an appeal is likely to succeed? Also can anyone suggest appropriate wording to use-? The client has been taken on by me recently and unfortunately the Corporation Tax for year to 31/7/2006 was also late, it being paid 20/6/2007. Thank you
Michael Howell
Replies (5)
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Deduct in-year via PAYE
Your client can take the amount of current-year deductions he is suffering each month from his contractor off the amount of tax he has to pay over to HMRC monthly that he has deducted from his subcontractors and his PAYE/NIC liability for his direct employees.
He should have actually been doing this since about 2003/4 so there isn't really a viable reason for him to have waited so long for his refunds except possibly an incompetent book-keeper!
Re his appeal it is unlikely to succeed, under the old scheme he would probably have been refused a certificate too. Non-compliance in the recent past has always been a valid reason for HMRC to reject a gross payment application. They won't normally accept "crap agent" as a valid reason for appeal as all reminders (with due dates) are sent to the taxpayer as well as the agent so he should be aware of them.