CIS Deductions - Whose Responsibility?

This is probably a basic level question, but...

My subbie client has had an enquiry into his return, with the revenue-bot claiming that the CIS statements are invalid because said client was not registered for CIS (an omission that occurred before we were acting and which will now be corrected). Thus it is asserted that the deductions claimed against his tax liability are unacceptable he is now being asked to cough up tax to the same value.

Now I'm 99% sure that if the deductions were being made incorrectly (in this case, at 20% instead of the unregistered 30%) then that is the contractor’s problem, not my clients (the same principle as PAYE). However, before I send off the customary ‘sierra-oscar’ response to HMRC could anyone please confirm/correct my understanding - references to legislation/regulations would be ideal.

Many thanks.

(Apologies if it's been covered recently elsewhere around here.)

 

Short description: 
Who is ultimately liable for deducting CIS tax at the correct rate?
Topic: 

Comments

Typical HMRC

Roland195 |

Not following HMRC's argument here as surely the problem must be with the contractor. If your client was not registered (whatever that means these days) then HMRC should have instructed the contractor to deduct 30%.

For some reason they have gone with 20% which suggests that the contractor is not understanding their obligations but should not effect your client.

 

Euan MacLennan's picture

Evidence

Euan MacLennan |

Does your (non-registered subbie) client have CIS deduction statements/payslips from the contractor?  If so, send copies of them to HMRC as evidence of the tax deduction.  Should be the end of any argument.

johnjenkins's picture

The only

johnjenkins |

reason I can think of that HMRC would persue this line is that the contractor wasn't in CIS therefore no returns were sent in.

should_be_working's picture

Thanks all

should_be_working |

Thanks all for the reassurance.

Euan - I had already sent in the CIS statements at their request (though I suspected that original request was rooted in the contractor having messed up). Their assertion was the response to that.