hi :)

2nd attempt at my 1st post, if this one doesn't appear, i KNOW i'm doing something wrong! :redface:

i just wondered if anyone else has any knowledge of this?

we're a small joinery company with 5 employees in total, including me & husband as company directors. i do all the day to day paperwork & everything goes to our accountants once a year for the returns etc.

to my horror, i got a letter from HMRC this morning saying we have 'failed compliance' & will now be taken off gross payments & be subject to 20% deductions against labour costs that we invoice.

i own up that it's my ignorance in failing to understand the implications of a couple of late PAYE payments, but as we are currently paid gross, we don't have any CIS forms or returns to complete & i think i've become a bit 'blind' to the whole subject (plenty of more important things to worry about!).

we have the right to appeal, which i will obviously do next week. being a Limited company, if the appeal fails, we will be able to offset the deductions against monthly PAYE due. it's not ideal, but at least we won't have to wait until our year end to claw the cash back.

having a quick read around on the net, it seems a high % of companies are falling foul of the new rules on CIS & loads are being affected by this. if not Limited, some are even having to fold because they just can't trade under these circumstances!

so, anyone had any dealings with the appeals procedure?
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so, anyone had any dealings with the appeals procedure?

Sorry I can't offer any specific advise, just empathise with your predicament.

It's a while since I had anything to do with CIS but I know that the HMRC are keen to remove gross payment status whenever they can.

It's a shame that they never bother to chase the real culprits who have used the CIS scheme to gain an advantage over companies like yours who actually go to the trouble of employing people?

Hopefully someone might be able to offer some specific advice. Good luck with it anyway :)
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I wouldn't hold your breath. HMRC has taken quite a bit of flak over this but are not inclined to relax the issue.

Will the net payment status really effect you that much? You can offset the PAYE as you said and you should be putting something aside for the tax anyway.
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Hi Lexxy

Not sure what you mean. Do you meant that the 20% is to be deducted from what you invoice for labour to contractors under CIS rules? Or is it something to do with your employees (CIS doesnt apply unless they are subcontractors).
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thanks for the replies.

i'm hoping it won't affect cashflow too much as we'll be able to offset against the PAYE due the same month anyway.

i think it's more the extra hassle & form filling that will now be required that i really object to! it's not as if we HAVEN't paid at all, it was just a bit late (due to cashflow over the past few months).

i think we'll just have to grin & bear it, unfortunately.
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Hi Lexxy

Not sure what you mean. Do you meant that the 20% is to be deducted from what you invoice for labour to contractors under CIS rules? Or is it something to do with your employees (CIS doesnt apply unless they are subcontractors).

hi

yes, just what you said. we are the sub-contractor.
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It's a bit of a pain. Hate it. You can do it online though now which is a bit better. A lot of subbies tend to put there prices up though to lessen the strain on cashflow :)
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something we'll have to keep an eye on (amongst 1001 other things!).

thanks Maxine :)
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Or is it something to do with your employees (CIS doesnt apply unless they are subcontractors).

Refer to comment re: Real Culprits?
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