Application for GROSS CIS rejected

Application for GROSS CIS rejected

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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

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By User deleted
25th Jun 2007 14:51

Link to Rebecca's article as mentioned:
New CIS - how to stay registered gross

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By michaelbear99
29th Jul 2007 18:37

Gross CIS appeal SUCCESSFUL!
I am pleased to say that I successfully appealed agains the rejection for Gross status for my client.

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By michaelbear99
26th Jun 2007 16:58

Thanks for comments
All your comments and guidance is much appreciated: I'll post outcome of the appeal to the forum. Many Thanks

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By User deleted
26th Jun 2007 15:02

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.

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By michaelbear99
25th Jun 2007 17:38

Thanks for pointers so far......
Reading through the posting and the linked articles I can clearly see the criteria being applied: it does not look hopeful for an appeal does it? And a future application would fail through same criteria until the late CT payment re year to 1/7/2006 falls "out of the frame". The client currently holds an 18% (now 20%) deduction card and also uses numerous subcontractors. For the year to 31/7/2005 the CT was late but the company was due a £17,000 refund for tax year 2004-2005 because it had suffered deduction of tax way in excess of the deductions it had made from the sub-contractors used. The refund did not come until August 2006. A similar situation occurred for 2005-06 and a refund for that tax year of £21k has only just come through. Will the fact that the Revenue were vastly in credit (albeit on a different "account") cut any ice in the appeal process do you think? Going forward, if the client cannot get a Gross certificate, is there any way that refunds can be obtained regularly (quaterly at least) under the new system rather than always waiting until ages after the year -end in question?

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