CIS Deductions

CIS Deductions

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Sole trader accounts are being prepared for a sub-contractor from his own invoices which reconcile to his own bank statements. He has CIS statements from the various contractors but it would appear that one of the Contractors CIS statements has omitted one of the invoices.

My feelings are that the contractor should amend the relevant CIS Return that he made for that month to include the additional payment & pay over the tax that he withheld from the subcontractor to HMRC.

My colleague thinks that the contractor should simply repay the subbie the amount of tax originally withheld but not paid over to HMRC.

But this means that the subbie was effectively paid gross? So surely that is incorrect?

Any views?

Replies (2)

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By Howard Marks
30th Oct 2014 11:16

It is....

...incorrect but in all honesty I agree with your colleague.  Given the error happened a while ago, it's a one off and there will be no loss of tax to HMRC overall, I think it's the more sensible option.

 

It's probably the option the contractors' accountant would choose too!!

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RLI
By lionofludesch
30th Oct 2014 11:52

Acting for whom ?

Agree with Howard - that's the easiest way.

There are probably going to be no consequences but, if there are, they lie with the main contractor, which is fair enough as it was he who made the error.

I take it you're acting for the subcontractor ?  No problem for you or him .....

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