Folks, I can honestly say this matter is driving me out of the profession!
My client company is a subcontractor. They suffer 20% CIS deductions. Up to 31 March 2013 (covering from April 2012), they have a VAT liability of £200k approx (for 4 quarters). The P35 return submitted in May for 2012/13 shows a refund due of £150k approx due to CIS deductions. The company has been hit with £30k of VAT surcharges due to non payment of VAT each quarter. The reason the company cannot pay the VAT is because of the CIS tax suffered. This is simply ridiculous!
This post doesn't get anywhere near reflecting the HOURS I have spent on the phone with HMRC, with no real progress. The debt management team in Edinburgh simply see £200k of VAT owing and they have proceeded to the High Court for winding up proceedings. They acknowledge a PAYE/CIS refund due but they proceed with a legal case anyway. Fair enough, the company will owe a balance, but my main gripe is that HMRC PAYE in Newcastle are taking 4 MONTHS to process the P35, to agree and authorise the refund, to get "security checks" done and then rellocate to the VAT debt. In the meantime, my client incurs accountancy fees and possible court costs with the winding up order. And of course, no time to pay arrangement will be discussed until the PAYE/CIS refund is reallocated so again HMRC are the problem!
Furthermore, for 2013/14, we have filed CIS deduction info using EPS via RTI. HMRC have now issued a statement of liabilities for the PAYE and NIC due for 3 months with no account given for the CIS deductions suffered. HMRC are demanding £13k were the client is actually owed a £38k refund!!!!!! Their VAT bill for the first quarter is £35k so the refund would cover this, but no doubt a surcharge will be applied - NOT HAPPY.
I spoke to HMRC today and they need to check their system to see why the haven't allocated the CIS deductions info filed on EPS reports via RTI. They can see the details but they haven't been allocated (are their untrained monkeys at work here?????
HMRC also noted that for 2013-14, any refund of PAYE/CIS due will not be issued or reallocated until after the end of the tax year. So my client faces the same predicament!!!!
What can we do for this client in terms of:
- Getting the surcharges waived in the past and in the future
- Ensuring CIS deductions incurred monthly are processed properly by HMRC and reallocated to VAT debt (or do I go to Newcastle myself and key this info in to their "System" myself)
- Getting to talk to the right people in HMRC about this, not just random staff at Debt Management or Employers Helpline
- Complaining to the highest level of authority within HMRC about the handling of this company's tax affairs by their inefficient, ineffective and inadequate systems
Sorry if this sounds like a complete rant, but I guess it is exactly that! All help greatly appreciated.