I report the CIS suffered each month but have found a discrepancy between what my client was deducted and what the contractor reported. My client can verify that his invoices were paid less the 20% deduction so as i need to submit the final EPS for this year (yes I know it's late but I have been waiting for the contractors accounts assistant to email it) So, do I report my clients CIS deductions suffered figure or what the contractor has deducted and reported?
Which figures are out Georgie, your client's or the contractor's
If it's the subby's then no problem, just correct the cis suffered and submit the eps.
If the contractor's figures are out I would still be inclined to use the contractor's figures, but seeking to correct the discrepancies on the first month of the new tax year.
HMRC will only go by the figures submitted by the contractor, not the subby.
Just had a quick though (dangerous I know) He's not being stopped 30% is he?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
No , its 20%....It's the contractors figures which are wrong. Thing is though my client is a limited company so after I submit the final EPS I write to HMRC and request a set off against my clients CTax, and the rest is then refunded to the client.
Why would HMRC only use the contractors figures? That doesn't seem fair especially if they have a muppet in the payroll department?
I agree it's not fair but if you put your own figures in, HMRC will see there is a discrepancy and block payment. You're then left with trying to convince HMRC your figures are correct and the contractors aren't, which is likely to take months.
However, if the contractor has royally messed up, it may be better to use your own figures then try sort out the mess, I was just thinking of the easiest solution, and I could be wrong.
Maybe worth a call to HMRC if you have the time
Why should HMRC accept the contractors over yours? It's because that's the only record they have based on the CIS submissions each month This is then checked against the subby's CIS figure on the SA (in your case CIS suffered)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
He has had 20% deducted from his invoices for the 15/16 tax year , but the contractors statements of deductions are showing less. In the end I had to submit my final eps last night with the figures the contractor gave me even though I knew they wrong. They weren't very cooperative and became evaisive when I asked them to clarify what they had reported. I don't think it has been done on purpose I just think the accounts person hasn't a clue what she is doing. I have asked my client to verify with the contractor what they actually reported and any discrepancy to be adjusted this month.
Is the invoice amount the same and just the deductions that are wrong? If I'm reading it right you're saying client was due (say) £1000 and received £800 but statement is showing £1000 but deduction is less than the £200 it should be.
I was thinking possibly retention but this would be clearly marked on statements received, and the client would have received less money.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
No, what I'm saying is for the whole tax year clients invoices gross were £1000 (for example) , and the net amount that went into his bank was £800 so £200 was CIS was deducted from invoices.
BUT when I added up the contractors statements of deductions they show less than what was taken from my client - But when questioned they said they had reported the correct figure and then sent out amended statements but when I asked them to clarify the amount they actually reported I never got an answer. So I was left with the choice of submitting what I knew was right on the EPS or submit what I thought the contractor had submitted according to the statements I had. (This was 8pm last night) and after what you had said I didn't want HMRC to withhold my clients offset against his CT while they investigated.
So I have told my client to clarify with the contractor the correct figure and make an adjustment this month. .....Please tell me I have done the right thing.
No, what I'm saying is for the whole tax year clients invoices gross were £1000 (for example) , and the net amount that went into his bank was £800 so £200 was CIS was deducted from invoices.
BUT when I added up the contractors statements of deductions they show less than what was taken from my client - But when questioned they said they had reported the correct figure and then sent out amended statements but when I asked them to clarify the amount they actually reported I never got an answer. So I was left with the choice of submitting what I knew was right on the EPS or submit what I thought the contractor had submitted according to the statements I had. (This was 8pm last night) and after what you had said I didn't want HMRC to withhold my clients offset against his CT while they investigated.
So I have told my client to clarify with the contractor the correct figure and make an adjustment this month. .....Please tell me I have done the right thing.
Georgie
Ouch. So we have no way of knowing whether the Contractor has submitted the correct figures or not. Why have they issued a statement which differs from the amount they say they have submitted? It may be worth a phone call to CIS and check whether the statements are the same as that submitted by the contractor. They may not tell you, but it's definitely worth a try.
Assuming they help. If the figures are identical then I would be asking contractor for a refund to cover shortfall.
If figures differ then when making your claim I would also enclose a copy of the contractors statements, ideally evidence of payments received (some banks allow you to filter so that only these payments show) and a claim for the amount you are owed rather than that submitted on CIS sufferred, with a covering letter explaining why.
EDIT: I keep forgetting to ask this, has your client been getting monthly statements? He's supposed to
-- Edited by Leger on Wednesday 20th of April 2016 03:11:22 PM
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi Georgie
Sounds like the contractor is making a right royal mess of this. I would refer to CIS guidance notes, you will see that HMRC will intervene in the event of a 'dispute'. Sounds like it might not have got quite that far, but one to be aware of and talk to your client about. Then you need to agree a strategy which I would suggest includes as John says ringing CIS but if they won't talk to you (and they are the easiest office to speak to within HMRC I've found) then write to them with all your evidence.
Think I would also be getting involved in the chasing of the monthly returns, but only as that would be helping me to help my client at year end. Whilst also reminding said accounts clerk of her legal responsibilities by send word for word the section of the CIS guide about the need for monthly statements.
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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
