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CIS deductions

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Quick question

Subcontractor supposed to have their 20% CIS paid through their UTR number but doesn't know was it paid or not and the guy who was working for is basically ignoring.(Most likely hasn't been paid)

Can you check with HMRC under the UTR number if their is CIS paid on their behalf or not?

 

Thanks in advance 

 

Replies (22)

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JCACE
By jcace
03rd Apr 2020 22:10

Is the subcontractor registered in the CIS scheme?
Does subcontractor have any documents from contractor showing CIS deductions?
Does subcontractor have any other "proof" that CIS deductions have been made eg invoices and bank statements
Does subcontractor have the contractors name, address and PAYE reference?

All of the above will be helpful in demonstrating that CIS deductions have been made and should therefore be credited to the subcontractor.

Thanks (1)
Replying to jcace:
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By jcurran
03rd Apr 2020 22:19

jcace wrote:

Is the subcontractor registered in the CIS scheme?
Does subcontractor have any documents from contractor showing CIS deductions?
Does subcontractor have any other "proof" that CIS deductions have been made eg invoices and bank statements
Does subcontractor have the contractors name, address and PAYE reference?

All of the above will be helpful in demonstrating that CIS deductions have been made and should therefore be credited to the subcontractor.

Yes he is registered for CIS. Only thing he has is bank statements of what was paid to his bank account but is unable to get invoices from the contractor, he has the name and address but not the PAYE.
Bank statements don’t prove that the CIS was paid so I was looking to see can this be checked with HMRC?

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Replying to jcurran:
JCACE
By jcace
03rd Apr 2020 22:34

The invoices I had in mind were the ones that the subcontractor had given to the contractor to pay, showing the amount before any deductions. How does he know that any deductions were made?

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Replying to jcace:
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By jcurran
03rd Apr 2020 22:42

jcace wrote:

The invoices I had in mind were the ones that the subcontractor had given to the contractor to pay, showing the amount before any deductions. How does he know that any deductions were made?

No he didn’t, construction workers working for their own generally don’t invoice the the person they are working for they they do their hours during the week and are paid at the end similar to an employee. The main contractor didn’t provide him with a statement showing what he was paid it was just transferred to his bank account.

That’s the point of the question I am asking because he doesn’t know if it was paid can it be checked with HMRC with the UTR number.

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Replying to jcurran:
RLI
By lionofludesch
03rd Apr 2020 22:59

jcurran wrote:

jcace wrote:

The invoices I had in mind were the ones that the subcontractor had given to the contractor to pay, showing the amount before any deductions. How does he know that any deductions were made?

No he didn’t, construction workers working for their own generally don’t invoice the the person they are working for they they do their hours during the week and are paid at the end similar to an employee. The main contractor didn’t provide him with a statement showing what he was paid it was just transferred to his bank account.

That’s the point of the question I am asking because he doesn’t know if it was paid can it be checked with HMRC with the UTR number.


You're right. They don't. But here's why they should.

In a dispute, the fella with the best evidence wins.

HMRC have very poor evidence. Their records appear to be some sort of state secret. To get access, you seem to need to tell them what you think first.

Nevertheless, pursue them with vigour at the CIS office. Eventually, they'll come up with something.

However, despite the above comments, it is in your client's interest to put his case for them to check. It makes him appear much more plausible.

Thanks (3)
Replying to jcurran:
JCACE
By jcace
03rd Apr 2020 23:11

My question regarding whether deductions were made remains. If he was working for £20/hour put only receiving £16/hr, then 20% was being withheld. It doesn't mean it was being paid to HMRC, but he can tell a deduction was made.
If on the other hand he doesn't know how many hours he had worked, or what his hourly rate was, he will find it difficult to establish whether any deductions were made in the first place.

Thanks (1)
Replying to jcace:
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By SXGuy
04th Apr 2020 08:44

Not really. He should know what he's gross pay is and what was paid to him. The difference is 20%.

Not being funny but the subbie should be keeping track of the hours worked the rate that's billable. Because how else can they check that the 80% paid to him is correct?

Think your subbie had been abit to relaxed with it all and has helped to create this mess hinself.

Thanks (2)
Replying to SXGuy:
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By jcurran
08th Apr 2020 10:08

SXGuy wrote:

Not really. He should know what he's gross pay is and what was paid to him. The difference is 20%.

Not being funny but the subbie should be keeping track of the hours worked the rate that's billable. Because how else can they check that the 80% paid to him is correct?

Think your subbie had been abit to relaxed with it all and has helped to create this mess hinself.

I don't think you seem to understand the question. He knows what he worked and what he was paid (net). What he doesn't now was that the main contractor paid his 20% CIS deduction, this isn't down to the subbie who kept records of the hours he worked and the hourly rate he was paid. Him keeping a personal record doesn't mean the main contractor is going to pay his 20% that's the main contractors responsibility to do so.

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Replying to jcace:
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By Southwestbeancounter
04th Apr 2020 13:46

jcace wrote:

My question regarding whether deductions were made remains. If he was working for £20/hour put only receiving £16/hr, then 20% was being withheld. It doesn't mean it was being paid to HMRC, but he can tell a deduction was made.
If on the other hand he doesn't know how many hours he had worked, or what his hourly rate was, he will find it difficult to establish whether any deductions were made in the first place.

Valid points. In that instance he might find it difficult to prove that he’s not actually an employee too!

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By 01638603404
04th Apr 2020 10:41

I often send a polite email to the contractor in these cases asking them if they wouldn't mind providing the details for the client.

If you advise them that HMRC would need to be contacted in the absence of incomplete/incorrect records it's amazing how quick they respond.

That said they still rarely tie up with bank.

Thanks (3)
Replying to 01638603404:
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By jcurran
08th Apr 2020 10:10

Clients words the main contractor told him to f*** off and how dare he ask for this 8 months after leaving him.

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By Truthsayer
04th Apr 2020 17:31

Your accountant will know the answer to this. Your previous questions and your bad written English tell me that you are a freeloader.

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Replying to Truthsayer:
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By jcurran
08th Apr 2020 10:33

Truthsayer wrote:

Your accountant will know the answer to this. Your previous questions and your bad written English tell me that you are a freeloader.

"badly written"

Thanks (5)
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By pauljohnston
08th Apr 2020 09:51

Quite a few subbies "save" money because they dont need an accountant just a mate / wife who does their tax return.

If this is the case the money "save" could be an expensive mistake. 20 odd years ago I was asked by a subbies mother to do his tax return. I quoted and was told too expensive. The subbie used a local guy to do his tax return and this guy persuaded him to have the refund paid to the Guy so he could take his fee out and pass on the balance. When no balance was forthcomming a visit by the Subbie found the house that the Guy worked from deserted. So my £250 fee suddenly looked very good value since the Guy disappeared with the whole of the subbies refund which I was told was just over £3k

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Replying to pauljohnston:
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By jcurran
08th Apr 2020 10:12

This is no relevance to the question I asked.

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By sallyrichardson
08th Apr 2020 09:57

All subcontractors should create invoices to their customers - always. Subcontractors who don't create their own paperwork and are paid on an hourly basis once a week or once a month can be easily mistaken for employees.
Get "him" to create invoices from now on. If he claims for the CIS without statements on his tax return and there is not enough contractor payments it will be rejected. If he doesn't have the CIS statements or his invoices to prove the contractor withheld 20% then did not pay it over, they will find on the side of the contractor, and he has just thrown away 20% of his income.
Accountants may seem expensive, but they do actually save you a lot of this heartache, and a lot of money.

Thanks (2)
Replying to sallyrichardson:
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By jcurran
08th Apr 2020 10:15

sallyrichardson wrote:

All subcontractors should create invoices to their customers - always. Subcontractors who don't create their own paperwork and are paid on an hourly basis once a week or once a month can be easily mistaken for employees.
Get "him" to create invoices from now on. If he claims for the CIS without statements on his tax return and there is not enough contractor payments it will be rejected. If he doesn't have the CIS statements or his invoices to prove the contractor withheld 20% then did not pay it over, they will find on the side of the contractor, and he has just thrown away 20% of his income.
Accountants may seem expensive, but they do actually save you a lot of this heartache, and a lot of money.

I do loads of subbies who either git their CIS statement at the year end, monthly or weekly, they never have to submit invoices to the main contractor. My client has an accountant, just because you have one does miraculously make sure the 20% CIS deduction is going to be paid.

Thanks (1)
My photo
By Matrix
08th Apr 2020 10:45

In answer to your question, no, it is some sort of guessing game. You could look in the digital account but I doubt the deductions are there, whereas they should be.

If he thinks the tax was deducted then claim it.

Thanks (1)
Replying to Matrix:
RLI
By lionofludesch
08th Apr 2020 10:51

Agree. But the best evidence wins.

Alternatively, claim to have been an employee. That should really set the cat amongst the pigeons.

Thanks (2)
Replying to Matrix:
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By jcurran
08th Apr 2020 11:04

Matrix wrote:

In answer to your question, no, it is some sort of guessing game. You could look in the digital account but I doubt the deductions are there, whereas they should be.

If he thinks the tax was deducted then claim it.

In Ireland it's called RCT and you log in to the subbies account and shows breakdown of Gross pay, site number they worked at, main contractor and the tax paid, don't understanding why the UK don't have something as simple to set up.

Thanks (1)
Replying to jcurran:
RLI
By lionofludesch
08th Apr 2020 11:15

jcurran wrote:

Matrix wrote:

In answer to your question, no, it is some sort of guessing game. You could look in the digital account but I doubt the deductions are there, whereas they should be.

If he thinks the tax was deducted then claim it.

In Ireland it's called RCT and you log in to the subbies account and shows breakdown of Gross pay, site number they worked at, main contractor and the tax paid, don't understanding why the UK don't have something as simple to set up.

Yes - it should be like a Christmas Club.

Unfortunately, HMRC are playing the role of Park Hampers.

"How much do I have in my Christmas Club ?"

"Ah, that'd be telling. How much do you think you have ?"

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By [email protected]
08th Apr 2020 15:26

In this case, even though invoices were not raised but subbie is confident his gross rates were paid net I would submit claim to HMRC. They'll let you know if the record shows different and then you can progress it from there.
If you were intending to get paid from CIS refund I would expect the bill to be settled upfront - just in case!

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