Anybody top this chasing for a invoice to be paid.
We emailed all CIS subcontractor clients before start of new tax year that we expect are fee to be paid immediately from when they receive repayment (silly I know should be upfront or paid to ourselves) if they don't adhere to this then going forward after that they will be asked to be paid up front.
So wait for this subbie who didn't bother to listen
One subbie received his repayment 2 weeks ago, and invoice not paid he said he lives 20 miles from a bank and he would pay it soon, (what does he want us to do drive him to the bank)
Gave him a week and called yesterday to advise hasn't been paid his comment was "if your that desperate for it I' will pay it today" quite frankly we nearly lost the head with the client for that comment, he called back saying he would make payment and surprise surprise didn't.
How do you win?
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You obviously know that 'possession is nine-tenths of the law' - since you say "silly I know should be upfront or paid to ourselves".
I learned that lesson in a different context many decades ago, whilst working for a company that was facing financial meltdown due to a shortfall in new business.
On my own initiative I pulled a deal together (with the Royal Marines of all people) that would buy us another 3 months to get sorted - and presented the signed agreement to the CEO.
He was duly grateful ... but when I suggested there might be some commission payable to me (we had a salesforce that would've been paid if they'd pulled their finger out), he just laughed and said:
"If you'd negotiated with me *before* handing over the agreement, then I'm sure we could have sorted something out. But I don't need to *now*! Let that be a valuable lesson to you."
Some people (possibly including some of your clients) really can be that stupid.
I handed in my notice there and then ... but what you do is up to you.
Dump that client after payment is my advice.
Secondly, learnt a long time ago to not wait for fees from refunds.
Payment upfront or find another accountant.
There are a hand select few who I bill after but that's because of years of trust.
I don’t understand why you would wait for something that is outside your control, ie a clients refund, for your payment.
Get him back in the phone and when he says he will pay you now take his credit/debit card number and take the payment. Use one of the many apps that allow such one off payments. The guy is taking you for a ride.
Rule number 1 with CIS clients always have the refund paid to yourself or invoice up front.
Yep or at the very least, tempt the client with a clue as to how much the refund will be and how they won't get it until payment is received.
Rule number 1 with CIS clients always have the refund paid to yourself or invoice up front.
Only if the client has a good track record - got burned with this last year, once we filed the return client called HMRC and asked for the refund to be paid directly to him instead - surprise surprise he then disappeared without paying our bill
Your system might work some of the time but is ultimately set up to fail.
Either (a) cash before filing, end of
(b) run a client account, take the refund and pay net of fees.
I do (a), (b) is a flippin nightmare from a regulation POV but I know many CIS accountants do this, and your CIS clients might expect it. I dont do CIS, for this and other reasons.
Good systems remove points of potential conflict, and help your cashflow too.
As well as a regulatory PIT, there's the years (specifically the SEISS ones) where tax rebate is less than fees - or worse, when there is a tax bill (p/t CIS). It's harder to explain refunds being lower than fees, or having a tax bill AND a fee, than to hand a bill for the full amount!
Payment up front is the key. I strangely find subbies become quite keen to pay when a significant rebate is at stake!
I am starting to make them pay before I file to HMRC. If they leave then that shows they are not honourable.
Yes, unfortunately I can beat this. Subbie called around on April 20th with his usual amazing accounting system (big bag of unsorted but helpfully crumpled receipts) and asked me to contact him when I knew how much his refund would be.
April 25th I texted him to say his tax refund would just over £2K. When would he like to sign off the return and pay the bill. I got this text which is such a classic I will repeat verbatim:
"Yeah that's not great at all I'd it. few mates doing it themselves and taking home like 3.5/4K ? Reckon it'll benefit me doing it myself mate ?"
Obviously, although I had done the work already, my answer was "yes, come and get your paperwork"
No-one deserves to be treated like this but occasionally you meet idiots. The secret is to move them on and work on something more worthwhile. I'm sure many members can quote similar stories to this (unfortunately).
As you say, not as uncommon as one might hope.
But the truly terrifying aspect isn't the tax (or even the agent's sanity) ... it's that many of these subcontractors are supposed to be highly trained experts (dealing with gas or electrics or maybe structural integrity), and yet take their devil-may-care attitude with them and apply it to their work!
"We emailed all CIS subcontractor clients before start of new tax year that we expect are fee to be paid immediately from when they receive repayment"
The problem is of your own making.
Brand new clients, 50% upfront and 50% upon signing the return to be filed.
Current clients, 100% upon signing the tax return.
No submission until payment is made, this is a blanket approach not just to CIS Tax Returns.
We spend very minimal time chasing / reminding people for payment.
Bad debt... sorry yiu are dealing with people that don't care
PIA next year
Or chase him through the courts, personally ... ask yourself is it worth it... I mean if you've never done it before use it as cpd to explain to clients how they chase their bad debts
Even after a ccj they sometimes still don't pay
I try to keep bad debts down to 0.5% turnover.....
Have you got a credit card machine... then you say read your no out ...
With the odd exception, CIS clients are always going to be difficult - they are notionally self employed generally to the benefit of those engaging them with the only advantage to them being the possibility of recovery of expenses.
There is no way to prepare a tax return to the standards expected of you, your firm & professional body while having a vaguely satisfied client.
The higher your fee in performance of this, the more of a repayment the client will expect so for my money, you are better off avoiding the whole sorry mess, let the boy down the pub or whoever file whatever creative writing exercise they like & good luck to them.
I completely agree Roland. My practice now has very few CIS clients, although the ones I do have are excellent. In my experience, there are lots that don't value my work, think all accountants charge too much and think tax is something that only applies to everyone else.
I had to smile about the subbie I mentioned earlier (thought he would be better off doing his own return). As I hadn't got around to deleting him from my agent's SA client list post dis-engagement letter, I had a quick look to see if he had managed to sort things out for himself. His return showed he had mysteriously made exactly £5,000 less than my figures but had failed to declare any CIS suffered.
He therefore has a tax bill (and payment on account) due for payment by January 31st 2024 and I'll be filing a SAR about the additional £5K expenses.
What a dullard!
I completely agree Roland. My practice now has very few CIS clients, although the ones I do have are excellent. In my experience, there are lots that don't value my work, think all accountants charge too much and think tax is something that only applies to everyone else.
I had to smile about the subbie I mentioned earlier (thought he would be better off doing his own return). As I hadn't got around to deleting him from my agent's SA client list post dis-engagement letter, I had a quick look to see if he had managed to sort things out for himself. His return showed he had mysteriously made exactly £5,000 less than my figures but had failed to declare any CIS suffered.
He therefore has a tax bill (and payment on account) due for payment by January 31st 2024 and I'll be filing a SAR about the additional £5K expenses.
What a dullard!
It really does take a 'special' sort of person to attempt tax evasion and as a result end up with a tax liability where previously there would have been a repayment! But that's OK, accountancy is easy and anyone can do it themselves..
I know Yossarian. It made my day when I saw his tax return. I hate to think what his plumbing looks like!
We've most likely all been there with CIS / refund cases and all been burnt at one time or another. I certainly have been and abandoned the idea of offsetting fees against refunds sometime in the last century.
It seems to me that subbies take the proverbial on this issue. Do they wait to be paid until a project has been completed (or not insist on the nail if it's private work)? No? Well, sauce for the goose, mate.
Slowly, Slowly Catchee Money.....simply wait 12 months until he wants next year's repayment, make sure your fee includes an addition for the interest cost of acting as a bank, and as others have said take his card details when he delivers his records (next year).
