CIS Refund

CIS Refund

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I have a company that is owed 30k from the CIS deducted for 06/07

CIS36 filed over months ago - client is experiencing servere cashflow difficulties because of this.

Tax office permanently engaged so I have written to them asking when the refund will be made. No response.

Client is having to borrow to survive. Wants to pass on the interest to HMRC.

Can anyone advise what action should be taken to hurry this up and what the rules are re interest?

Thanks in advance.

Anon

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By stephenkendrew
01st Aug 2007 17:37

Don't pay them anything
I'm not sure whether it is possible in your case, but if the company owes HMRC anything (corporation tax or VAT) then don't pay it. They can set one off against the other if they try hard enough!

I usually find that encourages them to deal with things quicker.

Have a look at the VAT tribunal case of Paul Marsh (case no. v20091) - he paid £7,000 VAT late because he was waiting for a CIS refund. He won the appeal against a VAT surcharge and, in the words of the Chairman of the tribunal:-

"The final factor that would make any other conclusion in this case ridiculous is the realisation that if the VAT authorities, being all part of one tax authority, actually asked on 31 July or 7 August (the alternative final days for timely payment of the Appellant’s VAT) where “their money” was the correct answer would have been that “they”, the same tax collecting authority, had actually got it, or rather than were holding over four times the amount of the VAT payment. For the Appellant to be penalised in these circumstances would be remarkable and unacceptable."

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By User deleted
01st Aug 2007 21:09

Thanks all for the advice much appreciated.

Bizarrely, after weeks and weeks of trying the telephone was answered at the second attempt today and the very helpful lady said that it all agreed and that she would start the process today and that a cheque would be in the post within two weeks.

HMRC - I won't have a bad word said against them.

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Euan's picture
By Euan MacLennan
31st Jul 2007 18:36

Are you saying ...
... that the company is owed a balance of £30K of the CIS tax suffered on its income after setting off all the PAYE for employees and all the CIS deducted from the company's sub-contractors in 2006/07 and that the P35 was submitted correctly showing a £30K refund due to the company? If so, chase the company's PAYE district's Employer's Section for the refund. They are not usually engaged, but if they are, try fax.

If the company did not set off the CIS tax suffered from the PAYE and CIS tax liability or failed to complete the P35 correctly, it is in the wrong and is now begging a favour and will have to stand in line.

As to recovering the interest from the Revenue, you have not got a bat's chance in hell if the company has failed to avail itself of the set-off arrangements offered by the Revenue.

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By User deleted
31st Jul 2007 19:15

CIS
Thanks for answers.

Client is a limited company, was not aware of set off so did not set off from its own sub contractors (is now doing so). .All other obligations met in a timely manner including P35.

Client is going to apply for gross payment status but in the meantime is more interested in getting their 30k back.

As I say, letters unanswered and phones have been permanantly enagaged for the last month. I will try the fax approach but won't hold my breath.

I think that this situation is totally unacceptable. Im trying to do the client a favour and all the while losing hours on end of my time for which I am not charging.

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By mickshep
01st Aug 2007 16:12

CIS Refund - Don't hold your breath
I have a client in exactly the same situation, it tooks us while Dec 06 to get the 05/06 refund back, this is a joke, as the client has a December year end they had already paid their corporation tax for the year but ooh no you cannot offset one against the other as that's simply too complicated!!
Same situation for 2006/07, on speaking to HMRC PAYE section earlier this week the only advice they could give was to put it in writing as it might get looked at sooner, otherwise and I quote "we leave the refunds until last" I kid you not !!
What is really frustrating is that another client who did not pay there Class 1A NIC on time had a reminder statement by the 23 July, four days after the due date! It appears the process quickens somewhat when HMRC is owed money.
Rant over!!

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