No deduction statement for year end

[julie86]

Hi all

My partner is a self employed plumber and did some work under his UTR and got his money less tax. They are now refusing to give him his deduction statement, so when I do his year end accounts, how do I show that he has already paid tax on this money?

Thanks

 

[elaine@cheapaccounting]

Why are they refusing?

If they have deducted tax then they must provide this.

 

[julie86]

Why are they refusing?

If they have deducted tax then they must provide this.

We have no idea!! The money he has spent on phone calls and trips to their offices would pay for his time 10 times over! They were very very late paying him in the first place and seem very remiss in a lot of their admin procedures.

Can we check with the IR to see if they have paid this tax?

I cannot think of any other way to ask them for it!!

Funnily enough, sill waiting for yet another payment........

 

[elaine@cheapaccounting]

Are the payments under the CIS? Are you registered as a subbie? Is the company registered as a contractor?

If so - see here:

http://www.hmrc.gov.uk/cis/advice-con-pay.htm

Issuing payment and deduction statements

You must give a written statement to every subcontractor from whose pay you are required to make a deduction. You have to do this within 14 days of the end of each tax month. A tax month runs from the sixth day of one month to the fifth day of the next month. You can give a subcontractor a statement each tax month or, if you pay them more often, one for each payment. Always give it to the subcontractor even if you pay an authorised third party.

 

[julie86]

Are the payments under the CIS? Are you registered as a subbie? Is the company registered as a contractor?



.

My partner is registered self employed, but had to provide his UTR number in order to get paid by this company at all, and I believe they are contractors. Does he have to register as a subbie? He's only done two jobs for them and the other work he gets is for private individuals.

 

[David Griffiths]

As Elaine says, the contractor is legally obliged to give a deduction statement, but that does't help you if they simply won't. Your husband should have registered as a subcontractor, and the contractor verifies this via his UTR. They can't pay him at all if they don't get verification. Did they stop 20% tax or 30% - if the latter it means that he hadn't registered so he might want to sort this out in case he works for other contractors in future - although that does seem unlikely!

Given that you can't get the paperwork, you have to proceed from where you are. In fact the deduction statement isn't critical.

Complete the tax return on the basis of including the gross income in the sales figure. Put the tax deducted in the relevant box - Box 80 of the full version of self employment pages, and I'd add a note in the white space that the deduction relates to tax stopped by X Contractors Limited who have failed to provide a deduction statement despite several requests. (They should actually give these out monthly, not yearly)

 

[julie86]

Thanks for the advice. We will contact HMRC firstly adn then take it from there. Doubt he'll be doing any more work for this specific company but it woudl be worthwhile to make sure all the i'd are dotted and t's crossed for next time!

Thanks all

 

[taxattack]

Just to add to Elaine and David's comments: it may help to mention to the contractor that the penalty for not complying with the requirement to provide statements is £3,000, in addition to the monthly penalty of £100. Your partner will have little option but to bring this to the attention of HMRC in completing his own tax return (nb David's advice to make a note in the white space).

Chris

 

[Zeno]

Just to add to Elaine and David's comments: it may help to mention to the contractor that the penalty for not complying with the requirement to provide statements is £3,000, in addition to the monthly penalty of £100. Your partner will have little option but to bring this to the attention of HMRC in completing his own tax return (nb David's advice to make a note in the white space).

Chris

Just out of interest, has anyone heard of a penalty being actually applied for failure to produce deduction statements?

 

[David Griffiths]

Just out of interest, has anyone heard of a penalty being actually applied for failure to produce deduction statements?

Judging by the problems that some of my clients have had in getting statements this could be a big source of funds for the Revenue!

 

[Zeno]

Judging by the problems that some of my clients have had in getting statements this could be a big source of funds for the Revenue!

That was my train of thought too but I have never heard of it actually happening.