I have a client who was registered as self employed but retired from work in April this year.
He worked for a short time through a construction company so CIS.
He has been told that 20% tax has been deducted from his pay along with £12 for paying his wages.
He never received a pay slip/statement from the company whom he did the work for.
I have tried phoning on his behalf but the receptionist fobs you off saying that pay was done by another company.
He is worried that if I try to submit a self assessment and the tax hasn't actually been taken from his pay even though the contractor has said it has that he will end up with a tax bill.
Does anyone know how I can find out if tax has been taken without getting him in trouble.
If we can prove he has had tax taken then he wants me to complete and submit a self assessment but if no proof then he will leave it and pay me for time taken so far in investigating.
I have made several phone calls to contract and sent emails but not getting very far.
Would threatening them with going to HMRC be taking it too far if they don't comply?
I don't want to give up on this client as if he is due tax back then I would like to try and get it for him
Hi I havent any experience of CIS this way round, but I would perhaps suggest firstly writing to the company he worked for - best to find out if you can who the CEO or Managing Director and writing to them by name. State that they are obliged to provide an appropriate payslip/certificate showing the amount paid over and tax deducted within xx days of each tax period (I cannot recall but think it is 14 days - HMRC website will give you the lowdown!). In the letter give them say 14 days to respond and send the letter by 'signed for' post.
If they do not comply within the timescale you could then threaten them with HMRC and even court.
Certainly if your client has proof that he worked from them then he would have a case against them in court if HMRC say no tax has been paid so I would encourage him not to let it lie - thats exactly what they want!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I will have a look on HMRC and see if I can find any timescales for providing the payslip/certificate. I have contacted one of the directors through linkedin but may actually write to him now and give him 14 days to come up with some answers/information.
I will check with my client first to see if he wants to go down this route but thanks for the advice. I was thinking along those lines but wanted to hear someone else's opinion.
Bit of prevention rather than cure Elaine, but advise your subbies submit an invoice showing tax deducted and the breakdown of labour and materials etc. Preferably in triplicate with somewhere for the contractors rubber stamp. If you come across a difficult contractor advise client to send an S.A.E.
There's a chance that it will encourage the odd contractor to confirm the deductions before they realise they haven't got the cashflow to pay them over to HMRC. In any case he would have good backup records to show that the deductions should have been made even if they were not paid over or declared properly.
My memory when this CIS scheme came out is that the contractor was not at first compelled to send any sort of 'SC60' though I think that was revised shortly afterward.
You could just contact hmrc for the figures as they should have been sent in each month. If there was a legitimate £12 admin charge it could be true that the company was using an outside body to do all this but can the receptionist tell you who administered this for them so you can stop hassling her and go direct?
The client will not sign an authorization form as he/his wife is worried that if the tax has been taken from his pay but then not paid over to HMRC they will come after him for unpaid taxes.
It's all sounding a bit dodgy to me. I am going to try another contractor today who he was supposedly working through and see if they can shed any light.
The supply of a statement of deductions showing the subcontractors UTR, verification number, and amount deducted under CIS is a regulatory requirement under CIS. Presumably the company who the work was done for is legally responsible for this, regardless of who they farmed CIS admin out to.