HMRC CIS refund issue persists | AccountingWEB

HMRC CIS refund issue persists

The late repayment of Construction Industry Scheme (CIS) refunds relating to limited company clients by HMRC remains an issue for accountants, according to the ICPA’s Tony Margaritelli and other AccountingWEB members.

Margaritelli warned that refunds still aren’t being repaid as rapidly as they should be, despite assurances from working together groups that the issue wouldn’t arise in 2013.

“When I asked HMRC, their response was they were surprised it was happening. Last year, people were still receiving refunds in January, which is an absolute disgrace,” the ICPA chairman said.

"Apparently, it's the dreaded computer systems," Margaritelli added. "This time next year they'll be looking at real time initiatives and they'll say it shouldn't happen in 2014, but my answer would be let's wait and see. They did tell us at working together initiatives that we wouldn't have that issue this year."

When asked by AccountingWEB, the Revenue said that the delay in refunds was in part due to it being the “peak period” for receiving repayment claims following the end-of-year P35 deadline and neither confirmed nor denied it had anything to do with IT systems.

“We understand the impact of any delay in making repayments to customers. We are working hard to reduce our turnaround times,” a spokesperson said.

They added that all repayment claims up to and including 19 July had been cleared, except in cases where they needed to write to the employer for further information to progress.

The Revenue said it had ...


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CIS Refunds    1 thanks

Jackson-Scott | | Permalink

This issue has been driving us crazy for years now. Unfortunatley the clients don't understand, they think we are not doing our job as they are waiting so long for their refunds. We try to explain that we chase and chase the revenue but that is basically all we can do. I will suggest to clients that they / we write to Longbenton regarding 'extreme hardship'. If we all do this maybe they will get the message.

lrobertson's picture

CIS - still waiting since May    1 thanks

lrobertson | | Permalink

My client applied for a refund in May on the phone, They need it to pay their Corporation tax. They were told that an email was being sent to the team dealing with it but they wouldn't open the email until 3 September! They have still not received their refund and have phoned CT who said if they haven't received it a week before the CT is due phone them up and they will see what they can do. This is disgusting, they are quick enough to chase and apply penalties when you owe them money, but hang onto it for months when they owe you. How are small companies supposed to survive when you cannot predict when the money is coming in. Cashflow goes out the window! I have written to them as well, in June, on behalf of the same client and haven't had a response yet.

CIS refunds

razertoo | | Permalink

What has worked for me is giving the client copies of the correspondence and the relevant telephone number and asking them to contact HMRC andrequest the refund. Either they are not as polite as me or they can work the system better because they are certainly getting quicker results!!

CIS refunds    1 thanks

Chrisrb1975 | | Permalink

As per the above comments. My client is owed £3000 and, despite twice sending HMRC copies of the CIS deduction certificates and bank statements showing the net receipts from contractors, no repayment yet received. Refund applied for in April 2013. As per the example, the client has defaulted on VAT and has surcharges applied because of the cash flow problem created... This is effectively a one-man company and cannot afford these issues. If only HMRC accepted a 6 month delay is paying tax......

CIS refunds

Pozzer6 | | Permalink

A client of mine is about to be put out of business partly because of this. There are other factors involved but the refund due on CIS is significantly more than the amount owed for corporation tax and has caused late payment of VAT leading to surcharges.  We also have 2 different HMRC departments chasing for information already sent in with threats of further action - another waste of scarce HMRC resources!

CIS _ Still waiting too

cydsmith | | Permalink

We also have a client waiting for a refund despite a phone call in May and a letter at the beginning of June. When we last rang about 5 weeks ago we were told that the letter would not be dealt with until 29 September. That's just dealing with the letter - not issuing the refund. We complained to the Agent Account Managers and a couple of weeks ago we got a letter to say the refund was being processed, still no sign of the money though! We have clients who are sole trader sub-contractors. They bring in their paperwork in April, we complete their Self Assessment tax returns and any refund comes more or less straight back to them (99% of the time). So presumably the delay is nothing to do with checking deductions with CIS records as HMRC can obviously check amounts quickly enough under self assessment. If the P35 showed an underpayment HMRC would have been getting quite aggressive in their debt collecting by now and no doubt increased the debt with interest and penalties along with threats of court action, bailiffs etc. But they don't seem to be able to grasp the fact that they are themselves doing the very thing that they are aggressively chasing taxpayers for - non payment of debt!! The government made an announcement a few weeks ago about potential legislation to make large companies pay on time as late payment was crippling small businesses. They should look to their own systems first before they start to criticise others.

CIS deductions

0106781 | | Permalink

It has been a problem for years. However, last year 2011/12, we were shocked to get repayments in june! unfortunately 2012/13 seems to have returned to the old problem.

We have 5 companies due CIS repayments following submission of P35s in May. We wrote to HMRC chasing them at end of June. We phoned HMRC middle of august and they told us post dated end of june would not be dealt with until 25th october and claim processed after that!

I wrote to our local MP David Laws. He contacted the treasury. I had a phone call last friday advising me my local MP had in been touch and requested names of five companies, PAYE refs and amounts due and they would process immediately. Have received letters today from HMRC saying claims for 2 have been processed.

Not the way it should be done, should be dealt with better by HMRC, but got it sorted before companies need to pay Corporation Tax at end of month (probably 2 months earlier than waiting for HMRC to deal with!)

It doesnt seem right that Partnerships/Sole Traders get their refund almost immediately on their personal tax returns, but companies have to wait so long.

Also, it is not as though any interest will be paid on this refunded money either. Interest is paid on income tax refunds, but not on CIS elements of PAYE refunds. A clear disparity and discrimination between types of business!!




kouloura | | Permalink

I spoke to HMRC about a financial hardship claim and was actually advised by them that by the time the claim for this had been processed the refund would have probably been received. I pestered the life out of HMRC from when the P35 was submitted and received the refund end of July. I did contact the Account Manager but they cannot actually help - still trying to work out what the point if them is as it appears that until you have exhausted all of the HMRC departments they can do nothing!

patricia caputo's picture

CIS repayments

patricia caputo | | Permalink


I don't see that any of the posts thus far mention using the AAM route to resolve these issues.


CIS repayments

Jackson-Scott | | Permalink

I used the AAM route a couple of years ago as a last resort but as someone said previously they will only help out once you have exhausted all other routes.

patricia caputo's picture


patricia caputo | | Permalink


Kouloura's post crossed with mine.  


The AAM service service has been described as where to go when you are "Banging your head against a brick wall".


This service most certainly assisted me in a number of cases when my clients had waited an unacceptable time for a CIS set off.

HMRC CIS    2 thanks

quanticoaccountants | | Permalink

HMRC has for years adopted tactics that, in any other business sphere, would not be out of place on BBC's Rogue Traders programme.





CIS refunds

cameret | | Permalink

About 3 years ago when my client company was with a local tax office we could offset the 20% CIS deductions against the corporation tax liability within about a week i.e. the P35 overpayment. We did this by claiming 'hardship' and getting the local PAYE and Corporation tax offices to liaise with each other. Since the centralisation of companies PAYE there have been repeated problems where the CIS deductions entered on the P35s have differed slightly from the figure on the HMRC computer. Last year we had a difference of £70 (In about £50k deductions) which prevented a refund of about £15k from being repaid. When asked where the difference lay HMRC said they could not isolate it, so we had to prepare detailed analysis documents so that they could 'audit' our claim. I have seriously thought of suggesting that my client finds another accountant as I dread the annual ritual of trying to claim the CIS repayment. Ironically, an attempt to get gross payment status for the company was defeated on the grounds that corporation tax had not been paid on time - a timely refund would have more than covered that liability!

DMGbus's picture

PAYE section department specific

DMGbus | | Permalink

It rather looks like that it is NOT the type of tax that is causing the delays, but rather the department of HMRC involved.

CIS tax credit and repayments claimed via Self Assessment (by sole traders and partnerships) appears to run smoothly and unimpeded.

It is where PAYE / Collector of Taxes are involved where problems are being encountered - for example see another thread on Aweb:

So, question is "Why?".

Is it an unpublished policy to be as delaying as possible?

Is it errant management within HMRC?

Is it a case of under-resourcing on the part of HMRC?

Why has "Working Together" totally and utterly failed to get any results on this subject matter?








Limited Company CIS Repayments

JrainfordMAAT | | Permalink

I work for a small accounting firm, and we deal with mainly SME's. The majority of our clients trade under CIS and are limited, i have been dealing with the P35's and the repayment claims for CIS deductions for the last 5-6 years and i can honestly say that not one year has it been a smooth, stress-free process. My clients repayment figures are no where near as large as some of the other stories shared but i feel that shouldn't change how urgently it is dealt with.

2011/2012 - the first clients refund from the HMRC was at the end of September 2012, with the majority of them being repaid in November 2012 and the last one we received was in March 2013. I am currently still waiting for one particular clients repayment to be issued due to repayment claim not matching with their system. I had sent the HMRC a full breakdown of payment and deduction statements which had been number referenced to payments into the company bank account, the repayment still hasnt been sent and the 2012/13 repayment is now due for repayment as well. 


2012/13 - i have been chasing clients repayments since beginning of June 2013, i still have not received any response or correspondences from the HMRC relating to any of the repayments.

Not only do we have the aggravation of a head-banging process of chasing repayments, but it also makes us look stupid and incapable when we cant give our clients a clear answer as to why we have not heard about their repayment. 


CIS refunds

David Gordon FCCA | | Permalink


 It is our own fault.

 The CIS refund procedure has been a cart with three wheels for years.

 Regrettably us professionals will not act together in this matter. So HMRC continues to play silly buggers.

 They are happy to sit and talk, and so is ICAEW and ACCA, because the executive of those bodies do not want to upset their executive "Relationship" with HMRC's executives.

 -and Henry V archers' compliments to the peasants,

 But take action, no.

 We have the judgment in Ferguson v British Gas.

  At the end end of every computer there is a keyboard and fingers.

 Instead of going to the tribunal, I submitted a CIS matter to HMRC's disputes procedure.

 It is now five months. When I telephoned to ask what progress? the apologetic fellow on the other end advised that it "Was only a small office with few staff", so they were well behind.

 Enough said.


I have asked many people in

David Franks | | Permalink

I have asked many people in HMRC agent area manager why SA claims are repaid in a week and Ltd Co not looked at for months and generally not repaid for at least 6 months. Surely its the same process of checking deductions. I have now forwarded this to our MP. Non one as yet can answer the question. Its a disgrace. 


We also were advised for hardship for our worst affected client. We followed all asked of us to the letter.We were then told the claim had failed on the grounds we didn't send bank statements when we were told we would be asked for this is stage 2. We were then told hardship only gets your case looked at not paid. We were told that although we submitted the info on the P35 on 9/5 it was not scheduled to be looked by a hum until 23/8. Our client is still waiting for the money. £65000. 


Shemiltwilliams | | Permalink

We must have been lucky although it was a couple of years ago when we had to deal with this. The first case we received a whole £8.37 interest on a late repayment of around £800. The second we just reduced the corporation tax bill by what was owed. I haven't had time to fully read the new rules with RTI yet but it looks like one needs to submit EPS even if you have no employees, such fun.

hmmmm,    2 thanks

MzEden | | Permalink

We had our anti - money laundering training the other day, I have to admit that I tuned some of it out but I'm pretty sure of the following:

That anyone who kept money that they knew they were not entitled to was committing theft. (an acquisitive crime)

Any person who commits an acquisitive crime (i.e. one from which he obtains some benefit in the form of money or an asset of any description) in the UK will inevitably also commit a money laundering offence under UK legislation.

So, I pay Blogs & Sons & Co Ltd (who hopefully don't actually exist) twice by accident. One of us informs the other that it appears too much money has been paid and a refund is due but then Blogs & Sons & Co decides that the reason I have given for overpaying is 'not acceptable' and refuses to repay unless I can give, what they deem to be a suitable reason.

This is classed as theft as Blogs & Sons & Co are benefitting from having my money that they are holding and know they are not entitled to.

Sound familiar?

CIS tax refunds to companies

Akkountant | | Permalink

In five days this article has been read over 3,000 times, and every accountant or other replying here has experienced similar issues.

We got a result by going, with our client, to our local MP (Stephen Gilbert, mid-Cornwall).

If all the accountants / CIS taxpayers here did the same, this might be the most effective course of action, because after all the MPs are part of the legislature. We can't change the law, but they can.  Enough MPs raising the same topic is bound to have some effect... eventually.

Good luck!

It's not just limited companies...

Stalytax | | Permalink

I have an SA client who is owed a 5 figure sum every year that is inevitably swallowed up in 'Security checks' for months. In the meantime he struggles to pay PAYE and VAT, and is aggressively pursued.

Phone calls get nowhere, and no one can tell me why he is selected or when the matter will be resolved. I can sometimes get a promise to pay soon by asking to speak to superiors and escalating the case, but in reality it makes damn all difference.



Company CIS Repayments

Lympete | | Permalink

I am finding HMRC are dealing with company CIS repayments effectively by throwing away any evidence attached to letters such as CIS36 forms and claiming they are never sent by client companies. Once the statutory time limits are reached they attempt to close the file

11 months way    1 thanks

mounirsalim | | Permalink

My client used to pay CIS by direct debit, HMRC have managed to collect over £8K by direct debit last October, this is £6,600 more than needed. This is because the client had paid them by bacs at the same time not knowing they also took the full amount by direct debit. Since then I have been chasing them by phone, letters and faxes with no luck. Are they encouraging builders to do cash jobs and pay no tax whatsover?


CIS Refunds

Stephen6 | | Permalink

I have experienced this problem with  two of my limited company clients. It's very frustrating. The contractors of my clients admit that their book-keepers made a mess of the End of Year Returns, leading HMRC to disagree with the P35s completed by myself on behalf of the client. I need not point out what happens if you owe taxes to HMRC; perhaps the taxpayer should start issuing threats back.


CJLW89 | | Permalink

We too have had this issue with at least one of our limited clients waiting 16 months for a repayment! It is disgusting and, as previously said, some of our clients do not understand that there is nothing we can do about it. HMRC need to get their act together and start helping companies, especially small ones, instead of hindering them and causing hardship. You shouldn't have to send a letter regarding hardship to get your money back!

Penalties should apply in reverse    1 thanks

norstar | | Permalink

My own view is that where a taxpayer must pay a 5% surcharge on payments over 28 days late, HMRC should also be subject to the rule.

Simple really, you submit the return, they don't pay it within 28 days, they pay a 5% surcharge. If they query it and find it's all fine, it sticks, if they find errors, it's adjusted.

Same with interest. Late payment interest by a taxpayer should = repayment suppelment interest on refunds.

Totally agree with the Money Laundering comment and I agree it comes across that there is a unannounced programme of withholding refunds to stuff the coffers...

Nowadays I invoice them for wasting my time. They often refuse to pay and have recently taken to simply ignoring my letters full stop, but I have had one or two successes.

Either way, it is not acceptable and I'm seeing clients face going to the wall or losing houses they were intending to move to because of this illegal witholding of their funds.

Do you want it good?

the_Poacher | | Permalink

Public services - do you want them good or do you want them cheap? Governments have, for years, been replacing HMRC trained staff with poorly written computer systems and call centres staff trained to read from scripts. I afraid that we are getting what we pay for.

DMGbus's picture

New guidance 18 September 2013

DMGbus | | Permalink

New guidance puiblished 18 September 2013: 

Probably of little practical value apart from "window dressing" to maybe give the impression that the problem is with contractors claiming refunds rather than with HMRC under-resourcing and/or obstinacy in the repayment process.



kevinringer's picture

Captured vouchers list

kevinringer | | Permalink

Prior to New CIS we could obtain a "captured vouchers list" from our local HMRC, reconcile these with the CIS25 vouchers received and investigate differences. In those days most CIS was reported on paper yet HMRC were still able to supply us (by fax) with the captured vouchers list. Today many contractors submit online so it should be easier for HMRC to supply subcontractors or agents with an online "captured vouchers list". But HMRC flatly refuse. As a result we don't know what information HMRC has on files so have to wait for an enquiry to resolve differences. Come on HMRC - it would save you (and us) a huge amount of time if you could let us access the captured vouchers list online.

johnjenkins's picture

There is the problem

johnjenkins | | Permalink

in a nutshell.

Whenwe first started to ask for these printouts we were told Data Protection Act (which was a load of codswallop). Then we were told it's because of fraud (another load of bollony).So there can only be one answer as to why HMRC won't give them out and that is so that where records don't tie up they request bank statements so they can go on a fishing trip without having to open an official investigation.

There could be another reason but that would involve complete incompetance (surely not).

I do believe there is a place in Ireland where these printouts can be obtained but I've yet to find the address.

kevinringer's picture

Place in Ireland

kevinringer | | Permalink

johnjenkins wrote:

I do believe there is a place in Ireland where these printouts can be obtained but I've yet to find the address.

It's the Blarney Stone, ask any passing leprechaun.

kevinringer's picture

Place in Ireland 2

kevinringer | | Permalink

johnjenkins wrote:

I do believe there is a place in Ireland where these printouts can be obtained but I've yet to find the address.

Seriously, could be I have tried them previously without success. Maybe worth another attempt.

johnjenkins's picture

I've kissed

johnjenkins | | Permalink

many a blarney stone but still my wife stays. Perhaps I should try frogs.

patricia caputo's picture

CIS repayments for companies

patricia caputo | | Permalink


For companies that have suffered CIS deductions try this address:

CIS Centre, Hull

H M Revenue & Customs

Cherry Court

36 Ferensway




CIS Repayment delays

jeep | | Permalink

Tomorrow it will be better unfortunately tomorrow is always some time up ahead, never now.

I fail to understand why we accept that HMRC has the right to demand that our clients pay corporation tax or VAT where there is a credit for CIS tax paid being held by HMRC.

Once the P35 return is submitted then the credit exists. With RTI there is less of a delay in HMRC having the information that a credit exists. A letter sent to HMRC requesting that part of the credit be used to offset any CT balance payable is sufficient to have the CT balance paid from the date that HMRC receives that letter. Even where HMRC want confirmation that a CIS credit exists because they have failed to police the contractor side of the system and allowed contractors to fail in their obligations to make returns, they know that there is a claim for a credit. That should be sufficient to put on hold the collection of any other tax balance they claim is payable. Is it not the case that should HMRC bring an action for payment of for example CT where there is a tax credit for CIS suffered and a letter instructing HMRC to set off the CIS against the CT any Law court would agree that no tax balance was payable. HMRC are one organinsation not many and the way that they arrange their affairs is entirley up to them They cannot surely because of their lack of a competent system creat a liability where none exists. Surely CIS is not a liability to pay tax, not a tax in itself but a settlement of a tax liability. This is the approach that I now take. Some of my client's have withheld VAT some not paid CT. Where the DMU starts to make threats I contact them to let them know that my client has instructed me to seek an Interdict against HMRC to stop them harasseing my client for a non existent debt. So far that has proved enough to stop the letters being issued by the DMU. It has also speeded up the Employer's unit who have invariable been able to process the credit and arrange the offset within days of the DMU contacting them. I have claimed compensation from HMRC on behalf of my clients seeking compensation for my client's costs arising from HMRC's errors. The error being the issue of letter that threaten collection action against my client. One client has instructed me to withhold tax to the equivelent amount of these costs. It will be interesting to see where this leads. I have invited HMRC to process a writ in respect of VAT being withheld by one client, more than 18-months later they have not done so. All of my clients have paid all of their tax liabilities in full, all are compliant with respect to returns. All of my client's want to pay the correct amount of tax at the correct time. I thought that HMRC had the self same objective. The only porblem is that HMRC can not process their data within a reasonable amount of time and because of the way in which they arrange their affairs they note sometimes that a tax balance is unpaid but at the same time have a record that a tax balance is due to be refunded. They are then unable to effectively communicate one department to the other such that HMRC do not make an error and pursue a taxpayer for tax already paid.

CIS Repayments delays and CT becoming due.    1 thanks

Roy Prockter | | Permalink

I also have a client company in this boat - CIS refund due exceeds CT liability just become payable.

Time to Pay refused, as refund claim not showing on HMRC systems, P35 was submitted in April, claim letter early in September.

I now discover that the letter will not even be opened until 29th November 2013.

Client has written to HMRC refusing to settle CT liability until CIS is repaid, and written to his MP

No doubt collection HMRC procedures will carry on regardless 

I have a mind to send this thread to the MP as well, as the greater number of MPs that raise the matter the better.


CIS repayment delays

Jackson-Scott | | Permalink

 Great idea Roy to send this to thread to the MP. I'm sure the MPs don't realise what a major issue this is for small businesses.

johnjenkins's picture

I tested HMRC

johnjenkins | | Permalink

last year by putting an estimated P35 in. Low and behold, chasing letters about CIS tax deducted from subbies. I wrote back saying if you have the figure of CIS deducted from subbies, you must have the CIS figure that has been deducted from my client. Back came the answer "we do not have that figure, but please amend the P35 to show CIS deductions". Speechless.

raising with MPs

0106781 | | Permalink

I have already sent this thread to my local MP (David Laws). He dealt with my original problem with own clients pretty swiftly, so who knows if it will help us all!

raising with MPs

0106781 | | Permalink

Just to let you know David Laws did write to the Treasury about this and we have received a reply. A lot about doing their best! Have scanned the letter and tried to upload for you all to see, but didnt know how to attach a PDF. Can someone let me know how?

kevinringer's picture

There's no facility to attach a PDF

kevinringer | | Permalink

You either have to upload it to an external site and put a link in your post, or type out the contents. That's a great pity because we'd all like to read the letter.

Belling the cat

David Gordon FCCA | | Permalink


 We witter on and on about this delay in repayment claim problem.

 Nevertheless the fact remains that no accounting organisation is prepared to take substantive  action on behalf of its members.

 Also no informal or other group of accountants likewise.

  Talk, yes- Do something NO.Yet the "Doing" is not difficult.

 1) Withdraw from these fatuous "working together groups"

 2) Go sit at HMRC head office with flask and sandwiches until we are given our clients' repayment cheques. (Yes for real- I threatened this and got the money within a week.)

 3) A class action under the Ferguson v British Gas Judgment. The court fee would be £300, the work we could do ourselves.

 The reality is we, including myself, are justifiably too scared of retaliation against our practices to indulge in average trade union action.

 So, the executive at HMRC are entitled to claim that we are bothered by this, but not enough to do anything serious about it.

 It was the student nurse's first day on Maternity ward. The refined mum-to-be called her, "Oh my dear it hurts, it hurts, please tell the doctor the baby's coming"

The nurse ran to the doctor, the doctor asked what did she say, the nurse told him, the doctor replied do not worry it is not yet time.

later the lady moaned again "Oh my dear, oh dear, this hurts, please do call the doctor, I am sure baby is arriving"

 Again the nurse ran to the doctor, Again the doctor assured her it is not yet time.

 A little while later the lady let out a yell "Bloody Hell" - Ah! says the doctor, now its time.

 The moral of the story- if you are really hurting you do not have time to be polite!









rjoconnor81 | | Permalink

Similar story to all the rest, we have been chasing since April and still nothing.  Spoke to HMRC today and they said it will be November at the latest!  Still not good enough!  They also managed to lose a couple of letters (some of the parcel arrived but not all of it and yes we do staple everything together).  Client owes CT, etc. etc. 

kevinringer's picture

Right of set-off

kevinringer | | Permalink

Please refer to published in April:



 Q. The company has other HMRC liabilities. Will this affect my repayment?

A. Please tell us if you want to set off any repayment against other liabilities owed to HMRC by the company when you send us your claim. Section 130, Finance Act 2008 allows us to set off amounts that are due to be repaid against debts owed to HMRC, including those covered by a time to pay arrangement. If the repayment is greater, the balance will be repaid to the company.




The legislation is at Note subsection 7 “In this section references to sums paid, repaid or payable by or to a person (however expressed) include sums that have been or are to be credited by or to a person”. This means set-off is due on sums yet to be credited to the company ie HMRC should not wait until they have processed the CIS claim before agreeing to off-set the CIS against CIS or VAT.


Our local WT organiser has advised us to put every case to the AAM service.

Dont bother

David Franks | | Permalink

They are just another HMRC arm. They say this issue is caused by agents progress chasing.They are clueless on procedure or tax law.  They seem genuinely surprised my client needs is repayment as its only for £65000!


David Franks | | Permalink

Would it be worth getting BBC watchdog onto this?

DMGbus's picture

HMRC has the data

DMGbus | | Permalink

HMRC has data that it has no inclination to make best use of or helpful use of.

Here's my suggestion on the above matter:

Because contractors, under existing legislation, have a legal obligation to make CIS300 returns to HMRC.

HMRC therefore receives the data.   Instead of "burying the data" and keeping it secret, it should be USED as follows:

For Partnerships and sole traders:

Credit to the subcontractors' online Self Assessment account for the tax year that it relates to (EASY for HMRC to do as CIS300 has UTR of subcontractor).  Ideally the payer's name would be shown alongside individual monthly CIS300 amounts.   To be done monthly by HMRC.

For Ltd Companies:

Have a memo page for CIS300 returned amounts of deductions sufferred for the SubContractors PAYE/CIS/NIC account online.     Raise queries when EPS filings differ from returned amounts.

PAYE agents to have access NOW (NOT NEVER = some unspecified future date) access to PAYE/CIS/NIC accounts.

Start enforcing with penalties the matter of Contractors who can't be bothered to issue monthly tax deduction statements to subcontractors.  OR BETTER STILL ABANDON monthly statements and replace them with above recommended procedures with penalties for non-compliance - subcontractors to go online monthly to check that contractor has done a CIS300 return and the tax deducted has been credited.  If not credited then HMRC to investigate IMMEDIATELY.

THE PROBLEMS with my above suggestions, from HMRC viewpoint might or might not be as follows:

  1. Makes life better for subcontractors - as HMRC is most-certainly NOT a "customer"(taxpayer) focused organisation this concept would need to be "strangled at birth" so no chance of it being implemented! (Unless some radical culture change with regard to CIS / Collector of Taxes were to be forced in)
  2. Worsens HMRC cashflow - repayment delays would be come much less of an issue as problems could be highlighted and investigated / resolve much quicker - and I have to comment that some HMRC tax-repayment delay problems might just possibly (am I wrong?) be caused by Treasury instructions / monetary cashflow targets given to HMRC
  3. Reduces scope for illegal and unjust enrichment of HMRC - HMRC might have to become compliant with Human Rights legislation in respect of CIS deductions suffered (the phrase "State confiscation of assets" comes to mind here).  Assets being tax suffered with HMRC refusing to timely action to resolve repayment issues.




I sent this thread to my MP

Roy Prockter | | Permalink

I sent this thread to my MP last week.

Today I had a reply from HMRC to the letter they were not going to open until 29th November, requesting a CIS/P35 reconciliation - that was straight forward and is in the post this evening, with copy deduction certificates and bank statements showing receipt, and a reminder that the Corporation Tax will not be paid until they make the CIS refund.

Maybe if everyone contacts their MP HMRC would feel the need to make the service work, perhaps following DMGbus's suggestions!






Dont hold your breath

David Franks | | Permalink

My MP is also involved in our case. 


We sent in a cross referenced spreadsheet showing every deduction of CIS and how it totalled the P35. Each entry was marked with a number and cross referenced against the bank, the sales invoice and the CIS certificate. After 2 months it was sent back with a letter saying we hadnt provided proof of any deductions. I kid you not!! We have now been advised to say they were deducted against our client when he was a sole trader, despite this being legally wrong and a different tax system, and not matching either set of sales figures in the respective accounts. 

We also had a

 client who owed corporation tax and was going to have it offset against his Ltd Co CIS refund. This took forever, during which time we received many rude letters saying that he was no accruing interest. This is at 3.5% against the .5% accruing on is late refund. What struck me most was the complete surprise at HMRC that our client may be annoyed that he was being blamed for this when it was their own department! Their level of competence has fallen dramatically in the last two ears. 

and another thing.....

David Franks | | Permalink

HMRC obviously dont have CIS300 figures from contractors that add up to your P35 or they would have paid out. Therefore you will write in saying you are owed x they look and see y then write back refusing to pay on the grounds they dont agree. They wont tell you what they agree or dont agree on, so you can then go back and dispute what they say. When you ask them which payments they cant match, they wont tell you. Just warning you as you sound like you may be disappointed. This is after they take 7 days to move your paper from the post room to a desk, 4 weeks to open the envelope and months to write back telling you that in that time everything you sent has now become invisible to the human eye.