Outrageous wait for CIS rebate

Outrageous wait for CIS rebate

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Just thought I'd pass on what we were told today. We have been chasing a very straight forward CIS/PAYE rebate for a limited company for 2012-13, which was finally agreed In August. But nothing arrived. When I told them, they said it would be re-issued wthin a week. Again nothing arrived. When I called again today, they are saying it is a MINIMUM wait of 4 months before they will be looking at it.

Some of that CIS tax was taken from his income in April 2012, on which he had to fork out the corporation tax for in January 2013. So he is looking at paying double tax, and then they expect him to wait nearly 2 years (possibly longer at this rate) to get half back.  

Surely this in totally unacceptable ?

Replies (12)

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By stratty
31st Oct 2013 16:45

Ongoing Problem

Unfortunately this is an ongoing problem.

https://www.accountingweb.co.uk/article/hmrc-cis-refund-issue-persists/546775

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Jennifer Adams
By Jennifer Adams
31st Oct 2013 16:58

Read Rachael's article on this...

The answer to your question is, of course - yes, its totally unacceptable - however your client is not alone as Rachael wrote at the beginning of last month. The article produced 56 comments.

See here..

HMRC CIS refund issue persists:

https://www.accountingweb.co.uk/article/hmrc-cis-refund-issue-persists/5...

Do as one comment says and try the AAM route - I have used them in the past to good effect altho it must be said not re CIS refunds

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By DMGbus
01st Nov 2013 13:33

Ask for offset

HMRC have the power to offset CIS (overpaid per P35) overpaid against liabilities for other taxes (eg. VAT, eg. CT) provided that the taxpayer / their adviser makes such a request.

Silly to pay over CT and VAT on time whilst a repayment of CIS (per P35) is outstanding and long overdue.

HOWEVER before delaying paying VAT / CT a "Time To Pay" arrangement should be requested / negotiated.  An unexpected and late payment by a debtor (*) should be accepted as a valid reason for a TTP arrangement.

(*) Debtor = HMRC CIS overpaid per P35.

As a general comment I would state that HMRC's handling of the overpaid CIS (per P35) is a scandal worth examination by the Public Accounts Committee.

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By DMGbus
01st Nov 2013 13:34

Professional bodies / Working Together

Via the "Working Together" forum professional bodies appear to have been rather ineffective in resolving the CIS tax repayment delays.

As a general comment I would add that some issues that in my opinion  should be looked at by WT never make it to WT, or rather if they have then again we have a  glaring lack of results...

Issue of penalties not until accrued to four months worth (eg. P35 2013)Issue of penalties incorrectly (eg. closed PAYE schemes 2013)

And at a higher level than WT I can't recall seeing any representations from the profession on the  subject matter of penalties being levied where there is no tax liability (eg. SA returns and CT returns).  The charity Taxaid I would have thought might have been active on this matter - it might just be that I've been remiss [not looked hard enough]  and not seen anything positive that has actually happenned here.

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By ccassociates
01st Nov 2013 09:58

WT is a waste of time

ICPA has raised the question of late CIS repayments continuously through WT and any other forum it can. HMRC refuse to adress the issue at local level under the guise of it is not a major issue and we cannot comment on individual cases.

WT has become a joke and is not fit for purpose

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By rjoconnor81
01st Nov 2013 12:31

I had a very similar conversation with HMRC regarding a CIS repayment that one of my clients had been waiting six months for.  We sent the original request letter on the 9th April, HMRC then requested proof of the CIS suffered three months later.  We sent all to them, they lost it, we sent again.  When chasing them and making sure they had received everything I was told that they wouldn't be looking at it until December!  I absolutely blew my top, and eventually was put through to a manager.  The wait until December was for NEW claims and as ours was started in April it would be looked at sooner.  Two weeks after that call we received a letter saying they had confirmed the rebate and subject to security checks the money is on it way (well in 4 - 6 weeks!).  We are still waiting for sight of the refund but the 4 month bit might not have been correct and as long as the process was started before now you might be nearer the top of the pile.

 

I am in no way defending HMRC and think that waiting nine months for a rebate is terrible, but the four months part might not have been correct information.   

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Replying to North East Accountant:
By cfield
04th Nov 2013 11:48

Possible solutions

Although companies can no longer automatically offset CIS payments against corporation tax (since 2002) you can still ask HMRC for an offset. Perhaps that might be a "back door" solution to the problem, although too late for 2012/13 if the client has already paid the CT for that AP.

As a limited company, you are allowed to automatically offset CIS suffered against PAYE and CIS owed for your own employees and subbies. That solves the problem for most CIS contractors, but don't forget the RTI submission for recoverable amounts or else HMRC will still chase you.

Why not apply for gross payment status? You only need a £30,000 turnover (excluding materials) although for companies this is per director. It should go through on the nod if the client has a clean record for payments and submissions.

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Morph
By kevinringer
04th Nov 2013 13:45

Working Together - the (partial) solution

Our local WT group has put a potential solution to national WT - give agents access to the captured vouchers list. This will enable agents to reconcile everything before submitting a claim. Why would HMRC agree to this? Because they will save resources. Ideally we would want to access the list online. But I guess HMRC will claim they don't have the funds to give us access. Instead they can employ one member of staff to take calls from agents and fax the lists out. yes I know that is "last century" - but that is how HMRC work. In the long term subbies need to be able to access the lists online - that way they will sound the alarm bells if a contractor doesn't submit their monthly credit. Currently HMRC will be unaware of a contractor failure until the subbie attempts to claim the tax the following year.

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By ringi
04th Nov 2013 13:58

What about drafting a letter for your client to send to their MP

I have in the past found that a letter setting out all the details and a time line to my MP have got HMRC to act quickly once my MP forwards the letter to HMRC asking for their.

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By David Gordon FCCA
04th Nov 2013 16:46

I repeat

 

 Unless our professional bodies are prared to take meaingful substantive action on this matter, HMRC will continue to in effect to hold two fingers up to the profession.

 The time for wittering in WT sessions is long past.

 If anyone from HMRC is reading this, you and your colleagues are dishonest. You know the system is not fit for purpose.

 I have sked HMRC a simple question: How much tax was reported by the contractor, via his monthly returns,  on account of my subcontractor client, for 2011-2012? (Under the s/c's UTR ref)

 HMRC is unable to provide that information. Specifically their computer cannot supply that information. No buts or maybe's. The information according to one HMRC officer "Is in limbo". So when they ask you to provide proof of your claim, it is because their computer cannot tell them what tax HMRC is holding.Next time HMRC asks you so to prove, ask them to provide details of how much tax they are holding on the taxpayer's account for the year in question..

 

 

 

 

  

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By taxhound
04th Nov 2013 17:13

I would also like to chuck in

HMRC's failure to repay PAYE overpayments in general unless the employer can explain EXACTLY how the overpayment arose - and human error is not an acceptable excuse.

Disgraceful behaviour by HMRC In my book.

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By Minnie136
04th Nov 2013 18:39

Only 4-5 weeks now!

PAYE office has told me that the repayment will be made to my client in 4-5 weeks.  I have spent a huge amount of time on this including reconciling everything to ensure that CIS and PAYE depts have same info and writing letters of extreme hardship.  I was amazed that a repayment due on a P35 does not mean that that the tax will be repaid - you have to "claim" it - and once you do that then you are at the bottom of the pile for the 4 month process!  Eventually a lovely lady from PAYE Benton called, advised me to sort out a final issue with CIS regarding an outstanding return and my client would be repaid.  Since I could not call her, she called me back every few hours until it was sorted.  Fingers crossed that client receives cheque soon.

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