I have a new client (waiting for authorisation codes to arrive) who has all his income under CIS and is deducted tax at 20% on all income (approx. £23,000 for 16/17). Which in theory should result in an overpayment of around £700 before considering if there are any allowable expenses. HMRC have revised his entries on his 2016/17 tax return, (completed by previous accountant and therefore I don’t know what the original entries were at this point). A revised SA302 has been issued resulting in a balance of 16/17 tax to pay, payments on account for 17/18 and recovery of the refund issued after the original tax return was submitte
After reviewing his paper work I have discovered the following:
1. He has been issued with two UTR numbers. Original UTR number he had for previous self-employment period years back (A) & another issued when he resumed self-employment after a long spell of employment. (B)
2. A small amount of CIS tax deduction has been allocated to UTR (B) by some contractors, but the majority of the CIS tax deductions have been allocated to UTR (A) by contractors he sub-contracted to in his self-employment period of years ago as they just used the information they already had on file for him.
3. The tax return submitted used UTR (B)
Therefore, I’m 99.99% sure his entries on the original 16/17 tax return were revised by HMRC to only give him the CIS tax suffered under UTR (B) as they have possibly chosen his return randomly to verify the entries with the CIS returns they receive from contractors and therefore only checking the CIS records for UTR (B) because that was the UTR on the tax return.
I have today rung HMRC’s SA helpline with the client for him to pass the security questions before passing the phone to me. I tried explaining that the client has been issued with two UTR numbers and that their revised SA302 is wrong and that they have to look at the two records and merge them together and inform the client which UTR number to use going forward. All the person did was recite the numbers on the screen in front of them, telling me he has been given credit for CIS tax suffered but wouldn’t listen that this credit was the wrong amount. He told me that he wasn’t trained in CIS and eventually advised me to contact the CIS helpline which unfortunately isn’t open on a Sunday.
The client himself is a 63 year old gentleman who is going out of his mind with worry that he has to pay £4,725 immediately with the threat of penalties and interest if he doesn’t.
Incidentally when I started the online authorisation process both UTR numbers were valid with his current postcode and therefore I’m waiting for two separate codes to be issued to the client.
My question is:
Does anyone know who I should be contacting at HMRC to resolve this problem efficiently and quickly please.
Sorry for being long winded but tried to give as much information as I could. Hopefully I've not confused anyone.
Thanks for any insights.