PAYE & CIS TAX OWED BY HMRC

PAYE & CIS TAX OWED BY HMRC

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My client, a limitied company operating PAYE & CIS is owed £28K from HMRC.

They are owed £6K from 2010-11 & £22K from 2011-12 due to the fact that their contractors are deducting 20% tax from remittances to my client and therse amount to more than the PAYE & CIS deducted by my client on behalf of employees & sub-contractors.

P35s & monthly CIS returns have been submitted & I have written on several occasions to HMRC requesting a refund. I find it pointless & time consuming to phone as you end up speaking to a call centre with no detailed information.

Can we offset against VAT or Corporation Tax?

Maybe I should issue a winding up order against HMRC!

I am sure others have had this issue. Any advice?

Replies (10)

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By cyrynpen
19th Jun 2012 11:41

Corporation tax

You can have it set off against corporation tax but you have to write to HMRC to request that the overpayment is transferred to their CT system. There's no way to do it on the CT600 unfortunetly.

HMRC will probably argue that you can't do the offset but you most certainly can and you can quote their CIS guide to them! See first paragraph of page10.

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By twj4789
19th Jun 2012 13:01

Corp Tax

HMRC have offered to offset a CIS refund for Corporation Tax before with one of our clients however this wasn't possibe with VAT (this may have now changed).

We have been chasing for a refund and one HMRC office told us that if we fax a letter through with a large heading saying URGENT HARDSHIP and mention in the letter the client is struggling to continue trade while they hold the refund etc... then you should get a response in five days. Unfortunately it took two weeks but the amount was refunded!

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By Jane S-D
19th Jun 2012 21:36

you can certainly get it offset against Corporation Tax - I have a client where this happens every year. But you do have to kick very hard to get it to happen.

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By rockallj
19th Jun 2012 22:35

I'm with Jane S-D

You can, it is possible, but write to Employer's Office @ Longbenton, make sure you put in your reconcilation to deductions certificates & bank statements etc. tell your client not to hold thier breath and prepare yourself for a long wait...... Last year's CIS refunds for a number of my clients took on average 10 months for refund/offset.

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By DMGbus
20th Jun 2012 14:14

TTP

Time To Pay arrangement (TTP).

If the undue delay in receiving the overpaid CIS tax is causing hardship then I would seek to obtain a TTP regarding VAT owing.

Alternatively try and use 20% (better still 30%) tax deduction subcintractors rather than gross paid subcontractors to improve cashflow.

 

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PJ
By paulgrca.net
21st Jun 2012 13:16

Complain

Send a formal letter of complaint and bill HMRC for the time you have wasted. 

 

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By PJR106
27th Jun 2012 11:01

Aug 2012

I sent a letter to HMRC mid May, 2012 requesting the CIS tax be refunded for our client Ltd company, I followed up the letter today with a call to be told that the refund will most likely be issued in August 2012!

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Euan's picture
By Euan MacLennan
27th Jun 2012 11:21

June 2012

I wrote to the Employers Office at Longbenton for several clients in early May.  I have had letters back on most of them to say that the refund request has been processed, but was no subject to the usual security checks.  The first repayment was issued on 18th June.

It seems to be going much more smoothly this year, provide that you have written to claim a refund.

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By rockallj
27th Jun 2012 11:29

@PJR106
That's quicker than I experienced last year, so is an improvement by HMRC's standards, but still pretty poor! Good luck.

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By janebrian
18th Jul 2014 08:28

norweigen tax set off against corporation tax

1. In a limited company if the Norweigen tax is in the directors name rather than the company can this be set off against corporation tax?    2. As Norweigen tax is 40% can the whole 40% be set off or just 20%?     3. If only 20% can be set off can I use the other 20% as an expense in the P & L?   thanks to anyone who answers

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