CIS Late registration

No tax previously deducted from sub contractors. What to do?

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company started construction work in early 2018 and paid sub contractors gross. They were not aware of CIS scheme having previously been s/e in different industry. 

Will they now need to register for cis from early 2018 and verify the sub contractors now? Is there any exemption from deducting the tax off the sub-contractors where they have failed to do so thus far? Do they need to declare it on the late cis return and then write to hmrc to claim exemption? If not, what is the procedure please?

I rang the cis helpline and the person I spoke to said not to worry about submitting those where no tax had been deducted!!

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By lesley.barnes
17th Dec 2018 09:48

You will need to back date to when the company should have been making deductions, verify the subbies as normal. What are the chances of recovering the money that should have been deducted from the subcontractors now. You will need to assess that and then put the CIS through as appropriate. If you can recover the money then it will be the gross payment less the CIS which you will have recovered. If you can't recover it then it is the amount that has been paid to the subbie inflated by the CIS that should have been deducted. Some subbies may have declared the money on a SA return and paid the tax on what they have earned if it was prior to 5th April 2018. You will need to check for double taxation because your client won't need to do the CIS for that. The client will also have penalties to pay as well from when they should have registered.

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RLI
By lionofludesch
17th Dec 2018 12:48

I rang the cis helpline and the person I spoke to said not to worry about submitting those where no tax had been deducted!!

If you can identify who gave you that advice, take it !!

If not, hold your hands up to HMRC. They'll probably let you off past misdemeanours if you've got the future correct.

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By frankfx
17th Dec 2018 14:29

Has anyone here been released from past misdemeanours?
We could use it as a precedent.

Identity check on call line .

I have asked for the HMRC agents name , and on occasions they have refused to provide surname.

I have then asked for call centre details.

Then escalated to centre manager to obtain details.

On one occasion the manger said ' we always have problems with that man !'
My response ' so why is he working on a customer facing call line?'

Manager response ' no comment'

Not sure that a taxpayer would be so 'alert'.

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