I have recently had two separate unrelated cases where a CIS subcontractor client has claimed his repayment through SA and the HMRC record shows the prepayment as ‘pending’ for an unusually long time.
I have, on both occasions telephoned and spoken with HMRC who tell me this is part of a verification process, where the client is sent a letter by post, asking for additional information. Their tax repayments are suspended in lieu of a correct response and failure to respond at all, will apparently, result in their SA account being closed!
Of these two cases, the first was a teenage lad who had just finished his apprenticeship and was in this first year as a subcontractor (he said he thought his Mum just threw the letter away), the second had recently moved address and hadn’t received the letter.
HMRC was unable to tell me, as authorised agent, what was in the letters and could only arrange for a duplicate to be re-sent to the clients within the next 30 working days, potentially SIX weeks!
While I appreciate that verification checks are a routine part of the CIS/repayment process, and in both cases, the client had failed to respond, I felt that asking the client to wait a further 6 weeks for the arrival of the letter, followed by however long it may take for HMRC to process the response, was pushing it a little!
There must be cases when the letter never reaches the client and without an advisor, they may never realise their SA account has been suspended or closed.
In 30 years, I have never come across this before, and now, twice in as many weeks – is this something new, or have I just been extremely lucky??