Incompetent or trying to pull a fast one.
Discussion
Done some work for a company with a few staged payments, 3 invoices for labour and 3 for materials, all nice and simple and they were paid under the CIS scheme. The last 2 invoices that we put in was just before Christmas and they were rejected for not being detailed enough, firstly this pissed me off because the materials one was fully itemised with a photocopy of everything we had purchased so they were even getting the materials at cost. The labour one was just a week of labour, there wasn't much to say about it.
Anyroad apparently their accountant is s
t hot and never misses a trick, this is the reason we were told the invoices hadn't been paid, so I went into the office and went through everything with them, everyone was happy and they said the last payment would be in out bank this Friday, good news.
Today I got an email off them with the statement for tax deductions attached and a quick message saying please can I forward a copy of the first invoice for £2400 as they have misplaced it.
However the first invoice wasn't for £2400, it was for £3000, the £2400 was the net payment after 20% tax and when I've looked at the CIS statement they have treated it as a gross payment and deducted another £480 tax of it. They have also deducted £300 tax of a £1500 materials invoice.
So I am now expecting a final payment £780 short on Friday, I have replied to them when I got in tonight but I think they are now taking the piss.
If the accountant is as st hot as the boss says then it can only mean that she is trying to pull a fast one on us, maybe bamboozle a simple tradesman with facts and figures. Not likely though because they will have to get up very early in the morning to outsmart me.
Where does this leave the tax situation though if they have paid too much to HMRC? I just want whats owed, its bad enough getting 20% deducted at source with no say in it.
Anyroad apparently their accountant is s
t hot and never misses a trick, this is the reason we were told the invoices hadn't been paid, so I went into the office and went through everything with them, everyone was happy and they said the last payment would be in out bank this Friday, good news.Today I got an email off them with the statement for tax deductions attached and a quick message saying please can I forward a copy of the first invoice for £2400 as they have misplaced it.
However the first invoice wasn't for £2400, it was for £3000, the £2400 was the net payment after 20% tax and when I've looked at the CIS statement they have treated it as a gross payment and deducted another £480 tax of it. They have also deducted £300 tax of a £1500 materials invoice.
So I am now expecting a final payment £780 short on Friday, I have replied to them when I got in tonight but I think they are now taking the piss.
If the accountant is as s
t hot as the boss says then it can only mean that she is trying to pull a fast one on us, maybe bamboozle a simple tradesman with facts and figures. Not likely though because they will have to get up very early in the morning to outsmart me.Where does this leave the tax situation though if they have paid too much to HMRC? I just want whats owed, its bad enough getting 20% deducted at source with no say in it.
ModernAndy said:
So they've taken off what HMRC are rightly owed AND then the same percentage again from what you should have received in your bank account?
Basically yes, we gave them an invoice for £3K, they duly paid £2400 into our account. We have now sent the final invoice which needs the tax knocking of for the labour which is fair enough but they want to take £480 of this as well for a tax payment for the first invoice which they think they paid gross for some reason and claim they cant find the invoice I gave them.They have also made a £300 deduction of an invoice for £1500 which clearly stated materials only.
This only came to light because they have just sent the CIS statement through. I only kept the labour and materials on separate invoices because in the past accountants doent seem to have the ability to work the tax out correctly when there are different amounts for fuel, materials, labour, hotels etc. on the same invoice.
They said they are looking into it today and getting back to me.
Flat-6 said:
ok, so forgive me... if there is no VAT involved... what are they deducting 20% of anything for??
When you work in the construction industry main contractors have to remove 20% income tax at source before they pay you. So if you just do CIS work all year for various people you pay 20% on everything you earn with no tax free allowance. You then have to claim that allowance back when you fill in your tax return.And the icing on the cake is on the previous years tax return you need to make a payment on account for the next tax year so you are effectively paying tax twice until you can get it back. You can reduce your payments on account but get it wrong and its penalty and fine time.
Its just such a doddle being self employed.
A 'st hot' accountant doesn't lose invoices or perpetuate invoice fraud.
My guess is they are suffering poor cash flow and/or looking to squeeze their suppliers. Don't tolerate it, if they go insolvent, you will be out of pocket. Do they do work for Carillion? That would explain any cash flow issues.
They cannot refuse an invoice providing it includes the statutory info, they could delay payment, but that is different. It sounds like some kind of fobbing off. When they get the new invoice, they will pay 30days or whatever after the date of that.
What you describe regarding them paying less than the invoice total sounds like they are engaged in some kind of fraudulent accounting. They should pay the full amount of the invoice and need to pay as per the terms, tell them you will be charging statutory interest from the invoice date, if the terms are not met.
https://www.gov.uk/invoicing-and-taking-payment-fr...
https://www.gov.uk/late-commercial-payments-intere...
t hot' accountant doesn't lose invoices or perpetuate invoice fraud.My guess is they are suffering poor cash flow and/or looking to squeeze their suppliers. Don't tolerate it, if they go insolvent, you will be out of pocket. Do they do work for Carillion? That would explain any cash flow issues.
They cannot refuse an invoice providing it includes the statutory info, they could delay payment, but that is different. It sounds like some kind of fobbing off. When they get the new invoice, they will pay 30days or whatever after the date of that.
What you describe regarding them paying less than the invoice total sounds like they are engaged in some kind of fraudulent accounting. They should pay the full amount of the invoice and need to pay as per the terms, tell them you will be charging statutory interest from the invoice date, if the terms are not met.
https://www.gov.uk/invoicing-and-taking-payment-fr...
https://www.gov.uk/late-commercial-payments-intere...
Edited by 4x4Tyke on Thursday 18th January 18:58
mickmcpaddy said:
When you work in the construction industry main contractors have to remove 20% income tax at source before they pay you. So if you just do CIS work all year for various people you pay 20% on everything you earn with no tax free allowance. You then have to claim that allowance back when you fill in your tax return.
And the icing on the cake is on the previous years tax return you need to make a payment on account for the next tax year so you are effectively paying tax twice until you can get it back. You can reduce your payments on account but get it wrong and its penalty and fine time.
Its just such a doddle being self employed.
If numerous self employed contractors hadn't fAnd the icing on the cake is on the previous years tax return you need to make a payment on account for the next tax year so you are effectively paying tax twice until you can get it back. You can reduce your payments on account but get it wrong and its penalty and fine time.
Its just such a doddle being self employed.
ked off back to their own country without paying any income tax at all CIS wouldn't have been introduced.Countdown said:
Do you think "Uk" contractors are any more diligent in paying the tax they owe?
Not necessarily but HMRC would have an easier time chasing them if they are British citizens. A lot of them aren't diligent about sending in invoices either which is why large parts of the construction industry operates on a self billing basis.Gassing Station | Business | Top of Page | What's New | My Stuff