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CIS

CIS debtor

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Could i have some advise on how to treat this. 

My client has a customer that dedcuts CIS from him. This client (a company) has gone bust owing my client quite a bit of money. My question is how should i treat the CIS aspect of this bad debt? My client has no idea if the tax has been paid over (contractor not commumicating). 

Doesn't the CIS invoice have to have been paid to be able to claim the tax back on the tax return? 

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By JoF
15th Jan 2020 09:18

Should you not firstly ascertain the facts. Has the tax been deducted?

Check how much of that tax has been paid over.

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By devonn
15th Jan 2020 09:21

He has asked the contractor but they wont communicate anymore.

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By JoF
15th Jan 2020 09:40

Surely he has records of one and you as his agent can access records for the other.

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By devonn
15th Jan 2020 10:55

My point is, if the invoice has never been paid to my client and is to be written off as a bad debt then the CIS can’t be claimed on the SA as he’s never received the payment. As CIS is run on a cash basis.

So you’d write off the gross invoice.

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By Cloudcounter
15th Jan 2020 09:39

CIS tax is deducted from payments so if an invoice hasn't been paid there is no deduction.

Provide the full amount of the invoice(s) (less VAT if relevant)

It doesn't matter if the CIS for previous payments hasn't been paid over to HMRC, provided that your client has the monthly statement as evidence. The client can still claim the credit. If they don't have the statement, they will need other proof of payment, usually the entry on the bank account

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RLI
By lionofludesch
15th Jan 2020 11:20

Agree with the above. If the client's not been paid, the tax won't have been either.

The tax isn't due until 14 days after the end of the month in which the client is paid.

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