Contractor didn't deduct CIS

Contractor didn't deduct CIS

Didn't find your answer?

New Contractor client caught by HMRC for failure to deduct- (but he does now!)

Has anyone any experience of "relieved from liability where subcontractors to whom payments were made have returned the income to HMRC and paid the liability relating to that income"  Reg 9(4) claim.

Client is still in touch with his subbies and has a good relationship with them (6 in all)

What format of claim is acceptable to HMRC? Signed statements from the subbies in receipt of gross income seems a tad too easy.

Has anyone any experience of what the Inspector will accept (assuming the subbie has complied....)

Replies (5)

Please login or register to join the discussion.

By Moonbeam
23rd May 2013 13:49

My experience..

I declared 3 years worth of non and under-declarations to HMRC on behalf of client (unprompted). We particularly stressed that client felt all subbies would have declared income and paid tax on it.

Declaration done in early 2013. HMRC checked all relevant subbies' tax returns and where these had been received, client didn't have to pay the tax. Of course the 2013 income tax was still payable as tax returns weren't yet due, even though most of it would have been paid by subbies.  No penalties were levied. Client co-operated fully with all queries from HMRC.

Thanks (0)
avatar
By cathygrimmer
23rd May 2013 14:06

CIS?

A word of warning - make sure it really is CIS work. I recently dealt with a case where HMRC wanted £80k in tax, interest and penalties. The client's original accountants accepted that CIS tax was due. In the middle of this, he changed accountants to one of my clients who referred it to me. I dug around a bit and noticed that most of the work being subcontracted to the client from contractors (who were big enough to know what they were doing) hadn't been subjected to CIS tax, asked questions of the client and it transpired that almost all the work the client did was non-CIS work - repairs etc. We eventually got HMRC to accept that none of the work he subcontracted was CIS work and so no tax, interest or penalties were due! It's worth checking exactly what is being subcontracted rather than assuming it is all CIS type work.

Cathy

[email protected]

 

 

 

Thanks (0)
avatar
By awoodj
24th May 2013 15:02

CIS requirements

.

Thanks (0)
Euan's picture
By Euan MacLennan
23rd May 2013 14:27

CIS Guide

The official H M Revenue guide is CIS340.

Thanks (1)
avatar
By WallyGandy
23rd May 2013 15:46

It's definitely CIS work

Just to clarify that the subbies concerned are most definitely within scope.

Thanks (0)