Tax not being paid forward on income
Discussion
My son is 21 and self employed. He worked for a company for X amount of time..During which time the company 'was' paying forward 20% of his earnings direct to the HMRC.
He's had SA tax bill of the same amount.
I'd like to think there's been some clerical error from said company but I highly, highly doubt it.
Our/his accountant is away till Tuesday.
The only proof he has at this point that the tax has been paid on his behalf is an end of year statement from the company. The figure is the same as what the HMRC are looking to retrieve directly from my son..
I can see where this is going. We're talking many thousands.
My lad is obviously very distressed. Question...How f
ked is my son if the company is not forthcoming with his money?
What is likely going to happen?
Forgive the somewhat scatty post...It's just landed in front of me.
TIA
He's had SA tax bill of the same amount.
I'd like to think there's been some clerical error from said company but I highly, highly doubt it.
Our/his accountant is away till Tuesday.
The only proof he has at this point that the tax has been paid on his behalf is an end of year statement from the company. The figure is the same as what the HMRC are looking to retrieve directly from my son..
I can see where this is going. We're talking many thousands.
My lad is obviously very distressed. Question...How f
ked is my son if the company is not forthcoming with his money?What is likely going to happen?
Forgive the somewhat scatty post...It's just landed in front of me.
TIA
Is it for the most recent tax year (2024/25)?
If so, the submission that the company has to make isn't due until the 22nd of this month and so it sometimes happens where the submission hasn't yet been done and you are reclaiming the CIS which hasn't come in 'yet'.
I would suggest giving it a couple of weeks and all the EPS' will be in (or should be).
If so, the submission that the company has to make isn't due until the 22nd of this month and so it sometimes happens where the submission hasn't yet been done and you are reclaiming the CIS which hasn't come in 'yet'.
I would suggest giving it a couple of weeks and all the EPS' will be in (or should be).
As I understand it (probably wrong)
As a self employed person, you son is liable for paying the tax so it will be him thats responsible for making good any deficit
However it also means the company owe him the same amount under his contract with them.
But I bet its as suggested above (fingers crossed)
As a self employed person, you son is liable for paying the tax so it will be him thats responsible for making good any deficit
However it also means the company owe him the same amount under his contract with them.
But I bet its as suggested above (fingers crossed)
Mr Roper said:
Abc321 said:
Is it for the most recent tax year (2024/25)?
It's for 2023/2024...I don't have all the details as to why it's only happening now.Cheers.
From your post, I assume the company is no longer trading? Never had personal experience of this with clients but have heard the stories.
A quick Google suggests the below after asking the contractor directly. It may be a bumpy ride as HMRC are the wrong side of useless...
Engage with HMRC: If your attempts to resolve the issue with your contractor prove unsuccessful, it is time to involve HMRC. Provide HMRC with all the necessary information, including your contractor’s details, relevant dates, copies of your supporting documentation, such as invoices showing the CIS deductions suffered and bank statements to show the payments received.
Explore Legal Avenues: When all other options are exhausted, seeking legal advice might be necessary. A solicitor specialising in construction law can assess your situation and advise on the best course of action. They can help you understand your rights, draft legal letters, and potentially initiate legal proceedings to recover the missing funds.
Mr Roper said:
TownIdiot said:
If he has evidence he was employed on a paye basis then the liability will fall on the company, and even if they don't pay it will still be credited to his account.
Self employed, CIS.Gary C said:
Mr Roper said:
TownIdiot said:
If he has evidence he was employed on a paye basis then the liability will fall on the company, and even if they don't pay it will still be credited to his account.
Self employed, CIS.If they don't pay one or the other asap then letter before action and claim.
If he tells HMRC and send evidence they will give him time and should also go to work ok the contractor.
Mr Roper said:
TownIdiot said:
If he has evidence he was employed on a paye basis then the liability will fall on the company, and even if they don't pay it will still be credited to his account.
Self employed, CIS.AIUI (assuming he's registered as a subbie with HMRC) he should have been getting statements from the Main Contractor to confirm what he was paid and how much was deducted at source. He should have used these to complete his self assessment.
Countdown said:
So is he registered as a Subcontractor?
AIUI (assuming he's registered as a subbie with HMRC) he should have been getting statements from the Main Contractor to confirm what he was paid and how much was deducted at source. He should have used these to complete his self assessment.
Correct....As I said above he got his statement. His accountant carried out his self assessment based on the information provided. The figure on the statements as being paid to the HMRC is the same figure that HMRC is chasing my son for.AIUI (assuming he's registered as a subbie with HMRC) he should have been getting statements from the Main Contractor to confirm what he was paid and how much was deducted at source. He should have used these to complete his self assessment.
He phoned the company owner who has advised that it's been paid as per...And that a similar issue has happened to another subby which has since been resolved, albeit 9 months later. He said he's going to provide proof. Wasn't defensive, shocked or confused.
Will be speaking our accountant (we share the same accountant) on Tuesday and go from there.
If there has been an error, it's mostly likely the company using an incorrect UTR / reference number as the payment reference. This is the only thing that identifies to HMRC to whom a received payment should be assigned.
It is possible HMRC have made an error.
If it's not, then I'm afraid your son is liable to pay the tax. As a self employed worker, it is his sole responsibility to pay. Any arrangement with an employee to pay tax on your son's behalf exists between them, not HMRC. The best you can hope for from HMRC is an extended time to pay - which they will likely grant.
Your son can claim the amount owed from the company via the small claims court.
It is possible HMRC have made an error.
If it's not, then I'm afraid your son is liable to pay the tax. As a self employed worker, it is his sole responsibility to pay. Any arrangement with an employee to pay tax on your son's behalf exists between them, not HMRC. The best you can hope for from HMRC is an extended time to pay - which they will likely grant.
Your son can claim the amount owed from the company via the small claims court.
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