I have a client that failed to file CIS returns for the last 3 years. All the returns were nil but even so, as you can imagine, the penalties imposed by HMRC are substantial!
Has anyone else seen this and more importantly has anyone had the penalties removed?
Could you argue that he did not need the scheme in the first place if all the returns due were actually nil? I have had penalties cancelled before on that basis.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
Judge Hellier made an interesting comment in the Bushell case :
that FA 2004, s70 required returns from people 'who make payments under construction contracts'. "If a person is merely a contractor, but not a person who makes payments then the Regulations cannot make, and cannot be treated as making, any provision requiring him to make returns".
Were all the subcontractors paid gross in your case? If there were none at all, then I would make use of any contact whatsoever with HMRC. eg. No subbies on the SA Return to substantiate that the Revenue knew he had no sub-contractors.
Regards,
Tim
-- Edited by Don Tax on Wednesday 14th of December 2011 10:28:30 AM
It looks like I will be able to challenge it as no subbies were paid at all during the last 3 years.
With regards to the SA return, they are also outstanding for 3 years (the client had a bad experience with an accountant and burried his head in the sand) but I am brining them up to date now.
Ahhh, bit difficult then. I've used a tax credits application as a bit of waffle but evidence of pro-active contact with HMRC. ie. What did they do, as they're the expert 'enabling organisation'. Good luck with it.
I had a client like this. I just phoned HMRC and told them that the company was not using subcontractors (which it hadn't) and HMRC agreed to cancel the penalties and also the scheme.
