Overpaid CIS deductions | AccountingWEB

Overpaid CIS deductions

We have 2 clients (C & H ) who have suffered CIS deductions. Both are currently in their second period of post incorporation trading. C maintained all their payroll records and paid over the PAYE due and took no credit for the CIS. We therefore have a Corporation Tax Liability and overpaid PAYE/NIC for 2009/2010 and 2010/2011. With H we maintained their payroll, however we were completely unaware of the CIS. They have overpaid PAYE/NIC which we wish to recover.

In both cases we wrote to the relevant districts for PAYE, now closed, and have been contacted by Longbenton in respect of C, a letter is awaited in the case of H. The letter dated 19 July from the PAYE Employers Office (are they the last PAYE Employer Office, all we will be left with is the Manadarins!) states the following:-

"Thank you for your fax of 28 May regarding offset of overpayments for 2009/2010 and 2010-2011 to Corporation Tax.

In order for me to review your claim I require further information. Please send me all(underlined) relevant payment and deduction statements (PDS) showing the limited company name for Tax Years 2009/2010 and 2010/2011 and a summary of these, month by month, with associated contractors names and addresses. Along with these I need crossreferenced copies of Limited Company bank statements supporting the PDS documents showing the Net Payments received, in order to substantiate the claim for CIS deductions as shown on the P35 Return.

What you should do now:

Complete the attached summary sheet in the following format:-

1) Enter amounts from each PDS onto the summary sheet unsing only one PDS per row

2) Write the corresponding amount and date it was paid into the bank on each row

3)Write the corresponding row number from the form directly onto each PDS

4)Write the corresponding row number next to the amount on each bank statement

5) Return the Summary Sheet with all the PDS and bank statements

Please note if Bank Statements are not cross referenced we will not be able to continue to review your case and the bank statements will be returned to you.

Mrs M Dembry



What is being said is that there is no trust on the part of HMRC in the public. Yes we used to submit CIS documents to HMRC to obtain offset. The part that is an insult is that appertaining to the bank statements. This is a primary record document and to request same is tantamount to an aspect inquiry inquiry under s9a without proper notificatiuon.

We have been advised by a remote operative, so far removed from the actual issuing office that they are incapable of comment only being a message transfer service, that the system has been instigated by the Accounts Office to simplify proceedures. I asked for the statute under which this was granted, that was obviously couched by myself in Ancient Greek because it was not understood. Surely it must be approved. I have searched the HMRC site CISR76020 and CISR73010 of the manuals hint at matters.

Let us look at the possible frauds:-

1) Income not in company- why then claim to offset against CT?

2) Contractor does not exist- would not a P60 suffice?

The whole matter has angered me- are we to subsidise HMRC, who will pay our fees

In France they would march down the streets, if we did here the Whitehall mandarins would laugh at us!

Has anyone else had this letter?







CIS verification

Harrisd412 | | Permalink

It appears that this is now HMRC standard operating system however I made the self same comment to the "working together" manager (Paul Abbott) last week.

I would suggest that you register for agent account managers issue resolution on HMRC website and send your specific example via the online form. I agree that the monthly payment schedules should suffice and the bank statements should only be requested via enquiry procedures.

I asked Paul to make CIS a priority area for his WT forum and he agreed to raise the agent problems with the stakeholders.

johnjenkins's picture

This problem

johnjenkins | | Permalink

has been going on for at least a year maybe two. A tax deduction from April 2009 still not being repaid?????? (not withstanding the first few months would go to pay for PAYE and Corp Tax)

It's a standard letter. Before Longbenton got involved the local office would offset what they had on their file and repay the rest. If there was a problem (CIS on P35 didn't tie up with what tax office had) a quick phone call to ascertain the offending month(s) and all sorted.

Then the powers that be wonder why HMRC is the butt of so many insults and micky taking.

Someone posted on another thread that he would do away with HMRC and let us do the job. I'm beginning to agree.

weaversmiths's picture


weaversmiths | | Permalink

I dont know if everyone has experience of this but, since the on-line monthly Returns and payments regime , when I come to do subbies accounts there are many many contractors not issuing any type of payment certificate to the subbie.  It has become a real mess and much more open to abuse than the old  system. I always issue a Payslip and a Certificate for my contractors; if only everyone else did the same.  There is no "official form" anymore and I think people need forms, otherwise they dont seem to bother.  I find myself writing to contractors for payment information which they dont seem to be able to find as they have "lost their laptop" or some such excuse.  They mutter words they dont understand like "paperless office"(:-).


louiseg's picture

System failure

louiseg | | Permalink

I have had a similar issue with HMRC not seeming to want to repay the overpaid amounts of CIS and more recently stating it would be October before the case was looked at.  Companies rely on this money being refunded immediately: if they owed the tax HMRC would very soon be knocking on their doors.  I have taken a case to my MP who is dealing with the Treasury directly to try and resolve it.

 The whole issue of refunds on overpaid CIS is very much tied up with the move of responsibility for this to Longbenton - an already over stretched department within HMRC.


Similar Problems

bj2404 | | Permalink

I too have encountered similar problems. What is most annoying about this is that in my case there was only one item in dispute (and I pretty much knew what it would be) but instead of just querying the one item  they ask you to send everything in. I wrote back with the copy payment certificates but point blank refused to send the bank statments and it got resolved any way. This year for one of my clients where I have acted as agent since 2006 they have suddenly decided there is no 64-8 in place even though they have happily discussed details over the phone in the past! When I rang back to say I had a copy of the 64-8 and did they want it sent in they said no - that they would make a note that there was a 64-8 was in place! I can only assume this is another delaying tactic. It is all so time wasting and frustrating.

This is one area where HMRC do not seem to be upfront - why can't we access the PAYE records of what has been paid and what has been captured from the CIS returns? I don't see why HMRC have to be so cagey with this - its almost as if they have something to hide themselves. They are quick to send out a reconciliation where there is under payment but not so swift when there is over payment.

johnjenkins's picture

The reason

johnjenkins | | Permalink

why they are cagey about it , and why thy want all the statements etc. is to show tax payer hasn't kept proper records so (yes you guessed it) penalties in abundance. Problem is they haven't got the staff to cope and with the offset of corp tax they've caught a cold.

louiseg's picture

HMRC 'Your Charter'

louiseg | | Permalink

Your CharterOur role

We make sure that the money is available to fund the UK’s public services by collecting taxes and duties as laid down by Parliament. We help families and individuals with targeted financial support.

We want to give you a service that is even-handed, accurate and based on mutual trust and respect. We also want to make it as easy as we can for you to get things right.

For more information go to The HMRC Vision

This Charter explains what you can expect from us and what we expect from you.

For more details please see Your Charter (PDF 332K).


Just copied this from HMRC Charter - so where is the 'mutual trust and respect' with CIS repayments

Yep - got one too

tonyglasbey | | Permalink

The client is a subcontracting company employing subcontractors, and offsets subcontractor deductions from his own CIS deductions withheld by the main contractor.  This usually leaves a balance owing to the company, even after then offsetting the company's CT liability. 

I received a letter pointing to an "error" in the 2011 P35, stating that deductions from subcontractors (box 23 did not agree with CIS300's filed. Then the wording became exactly as Ian's letter.

On investigation I found that the P35 was filed correctly, but thast HMRC had managed somehow to pick up the figure from box 23 of the 2010 P35 and include that in the 2011 return.

I have written back that in view of their error I am disinclined to accede to the request to provide the information they require, that I rigorously scrutinise the correct recording and treatment of all main contractor payments quarterly with oversight of the VAT return, and that if HMRC still insist on receiving the information they should do so under formal inquiry.

What I can't figure out is, why on discovery of a supposed error in returning deductions from my client's subcontractors should HMRC want to investigate the recording of main contractor payments to my client?

Watch this space...

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