CIS refund via P35

CIS refund via P35

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I have my first query from the tax office regarding the cis tax my client claims has been deducted from his income via CIS on his P35. They have compared this to what the contactors claim to have deducted on their monthly returns and, lo and behold, it doesn't agree. Why am I not surprised? I dare say (perhaps optimistically) it is a timing issue (with the contractors having pushed some of the payments into the current tax year), but at least everyone understood the importance of the old CIS vouchers and the date on them.

Yes, I know, the contractors should be giving out statements instead of the vouchers, and these should achieve the same objective, but when they are not on an official form, they just don't take it seriously enough.

I see a summer of trouble ahead. Anyone else suffering yet?

EL

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Euan's picture
By Euan MacLennan
04th Jun 2008 13:21

Timing
If HMRC have raised a query, it would seem that the contractors are at least fulfilling their obligations to file monthly returns, so why doubt that they are not fulfilling their obligations to issue deduction statements?

As to timing, the CIS deductions should be reported in the month of payment, not the month of invoicing or doing the work. If your company sub-contractor issued an invoice dated 31st March 2008 for the work it had done in March, perhaps showing the appropriate CIS tax deduction on the invoice and posting it to its PAYE control account, it should only have included that tax deduction on its 2007/08 P35 if the invoice was paid by the contractor before 6th April.

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