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Why has the contractor not supplied statements of

20% deducted. No statements of deduction provided. CIS say nothing has been paid to clients UTR code

Contractor is saying statements of deduction have been sent to client. They have not been sent. No tax what so ever has been paid by this contractor to my clients UTR code. What can we do?

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14th Nov 2017 16:54

Not a unique set of circumstances I'm afraid. There are contractors out there who have no intention of paying over the tax deducted and you can guarantee that there are operating through a limited company. You should prepare a schedule of what tax has been deducted showing the gross invoice value and reconciling with the bank. Make a claim for the CIS tax suffered and white box the fact that no certificates have been issued. One of my clients receives certificates as and when the contractor feels like issuing them and there's always a shortfall at the year end. If HMG hadn't singled out the construction industry in the 1970s for special treatment we'd never have had this problem.

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14th Nov 2017 17:07

Did the contractor just not pay the CIS tax over to HMRC or has he also failed to include the details of deductions in to his CIS returns?

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14th Nov 2017 18:35

The mistake HMRC made in 1975 was to assume that contractors are more trustworthy than subcontractors.

All you can do is to prepare by highlighting the difference between the invoices (or timesheets or whatever evidence the subcontractor has) and the amounts he has received.

If the subcontractor has no records of his charges to the contractor, shrug your shoulders and suggest that he starts keeping some instead of relying on unreliable contractors to do his bookkeeping for him. Because his laziness is likely to cost him money.

The up side is that HMRC have never challenged decent records kept by the subcontractor in my experience.

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