CIS paid under reg 9

CIS paid under reg 9

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I have a client who didnt deduct CIS in 2010 11 and a reg 9 was issued and paid. the contractor tried to reclaim the tax that was paid and that was denied , the contractors accountant is now pressing me for details of the tax office in question so that he can reclaim some of this r9 tax , isnt this absolute rubbish?

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By Carolynne
23rd Sep 2014 14:42

Unfair as it seems

Have I read this correctly, the tax NOT deducted from the Sub Contractor has been paid over via a Reg 9 by the Contractor?

 

If for example, £300 should have been deducted from the sub contractor by the contractor and it wasn’t, and £300 has been paid over via a Reg 9 to HMRC, by the contractor, because of their carelessness.

 

The sub-contractor does not have a voucher to re-claim this against his tax already paid, in his self assessment, as he was paid the full gross amount.

 

Once the Reg 9 has been paid, in a perfect world, HMRC would normally get in touch with the sub-contractor to tell them he is owed a £300 rebate. 

 

Once the sub-contractor receives the £300 rebate, he should then forward it onto the Contractor who paid it via the Reg 9. Otherwise he will have been paid the gross amount plus a further £300 which isn’t right.

 

It all seems like a loop doesn’t it. 

 

The problem being:  The Contractor is dependent upon HMRC getting in touch with the Subbie to offer the rebate, then you are depending on the Subbie to agree the money is the Contractors who paid it over, and you then have no way of forcing the Subbie to hand it over to the Contractor.  He is quids in.

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