CIS refund delaying tactic??

CIS refund delaying tactic??

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We submitted a request for our client's CIS refund for 2013/14 on 28 April in accordance with the helpsheet issued by HMRC that stated they would repay, within 25 working days, the CIS refund due to our client's company for deductions withheld from him at the tail end of the tax year that could not be offset against his own PAYE/NI/CIS liabilities.  We even went above and beyond the helpsheet list of required info and sent in our own spreadsheet that we had maintained throughout the tax year of his position so that HMRC could tie up his records at their end. [From bad experiences in the past, we prefer to request the refund be repaid in full to make it easier to keep a handle on our client's tax position, rather than offsetting against corp tax and having to deal with HMRC reallocations]

Today, lo and behold at the tail end of the 25 working day timescale, we received a letter from HMRC asking for a load of extra information that they should already have in their systems.  They are asking for:

  • ALL payment and deduction statements for the tax year
  • Company bank statements cross referenced to the CIS payments on the statements
  • And a CIS reconciliation statement that lists out all the information regarding invoices, dates of payments, details of deductions etc etc etc

Has anyone else come across what appears to be a delaying tactic in returning money to our client that is rightfully theirs?!?!  We could provide all of the information they are requesting but why should we?? Surely they already have this information on their systems and the fact that we receive this letter almost to the day that we were expecting a cheque doesn't sit right with us........

Replies (10)

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RLI
By lionofludesch
09th Jun 2014 11:19

CIS Scandal

The treatment of CIS deductions by HMRC is a scandal.  They like to act as your bankers but they don't want to send you a statement of what they owe you. They have the records - they should be providing the company with a copy as a matter of course, not asking you what you think they owe you.

The quickest way to get your money is to comply but, once you've got your refund,you should be letting HMRC - and maybe your MP - know of your experiences.

Complain - and ask for compensation for your costs. If appropriate, obviously.

 

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By rjoconnor81
09th Jun 2014 11:25

I really don't want to sound like I am defending HMRC, cause I am not.  When we have received this letter it is because what HMRC have for CIS deducted is lower than what has been submitted.  This might be because of timing differences (claiming CIS that wasn't paid until 6th April, or contractor not completing the CIS300).  

 

Send back the information they are asking for, but re-read the letter regarding points 2 and 3.  I have always understood that points 2 and 3 are only needed if there isn't a CIS statement confirming deduction and have only sent in that case.  I might be wrong though - hope you get it sorted soon.

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RLI
By lionofludesch
09th Jun 2014 11:40

Yes, but ....

Yes, but if they sent out proper statements, this rigmarole wouldn't be necessary.

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Replying to DJKL:
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By razertoo
09th Jun 2014 13:01

CIS

lionofludesch wrote:

Yes, but if they sent out proper statements, this rigmarole wouldn't be necessary.

Totally agree. If they did then you would only have to provide copies of deduction statements that weren't on the list.

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By DMGbus
09th Jun 2014 13:32

Ask HMRC for the data that they hold

If I come across this problem then I will respond along the following lines:

" Presumably the data that you hold disagrees with the data that we hold.  To save both your department and ourselves time and money it would be appreciated if you could supply us with the CIS deductions data that you hold.   We will then compare it with our data (thus saving your department time) and advise you where your department has incomplete and/or incorrect data."

Other advisors would probably demand a freedom of information disclosure from HMRC, but I'd try the above first.

 

 

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blue sheep
By NH
09th Jun 2014 13:26

tried that

from past experiance I think you will find HMRC will not provide that information.  Never understood why.

One thing that does annoy me though, is, yes I expect to get that kind of letter if the figures do not match, but it would be interesting to know if HMRC have ever sent a query where the figures submitted do not agree but are higher than they have rather than lower, I suspect not.

The same applies with Sole Traders CIS suffered figures I am sure.

 

 

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By countrygirl
09th Jun 2014 13:30

We have had this request for several clients.

We sent all the CIS deduction statements and a spreadsheet summarising them.  But HMRC sent themback saying to resubmit them with all of the bank statements cross referenced to the CIS payments.

We asked for a breakdown of the figures that they had for the CIS deductions so that we could try to work out where the difference was.  But they refused to supply the breakdown under the data protection act!!

Out client does a lot of work for householders which has no CIS deduction, there are groups of cheques paid into the account which include amounts with CIS deduction and amounts without.  I explained this and the numpty on the other end of the phone said that all of the payments that he received should have been subject to deduction!?!   I said even those from householders? He said yes.

It is not 5 minute job to cross reference the statements back to the CIS payments.

This whole situtation is absolutely deplorable.

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By DMGbus
09th Jun 2014 13:37

HMRC re CIS = "rogue traders"

The phrases "cowboy builders" and "rogue traders" come to mind here, except delete "cowboy builders" and instead substitute "jobsworths at HMRC acting like rogue traders".

HMRC really do give the impression that they are deliberately being obstructive in this matter, no doubt there a secret internal manual on this matter (or by word of mouth proceedure) that is witheld from public view for reasons of "protection of the revenue".

 

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blue sheep
By NH
09th Jun 2014 13:43

one thing to do is

we always make sure that we ask HMRC to offset any outstanding CT against the refund, at least that way it mitigates any further cashflow problems

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By stevebritgimp
08th Sep 2014 14:57

Similar thing on income tax

I had an unusual case where a client had submitted their own tax return, including significant bank interest from various accounts.  The client hadn't got the right figures, and HMRC wrote saying (para) 'your figures do not match ours' with totals but no details.  My first step was to write and literally say, 'stop wasting our time and give us the figures you have. itemised'.  Which they subsequently did.  And then we have to go through and sort them out.  So much information is already available to HMRC, but they are rubbish at telling you, and rubbish at acting on it.  It's like dealing with a petulant child playing 20 questions.

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