CIS Repayment Query

Good Afternoon,

I had a client who was due me a considerable amount of money that was CIS deductable, however, I ended up having to go to court for payment via winding up petition so had to disclose the total full invoice amount inclusive of VAT.

They eventually signed a tomlin order and personal guarantee and finally (after being late on several occasions) paid the full amount stated on the legal documents. A few months after this was settled they have now come back and said they made a mistake and should have only paid 80% of the documented Tomlin and Personal Guarantee amounts as they didn’t take the CIS into account so didn’t remove it.

Can I now direct them to deal with the HMRC regarding this as I have been clear and upfront in every dealing and the court petition clearly stated that the overall amounts were inclusive of VAT so the mistake is at their end not mine and in addition as I had to go through the legal process would this make any CIS deductions void so they are liable for the full amount.

Thanks in advance

Firstly. You should be asking a solicitor. It’s a legal matter. Not one which you should take advice from a public forum for.

My personal opinion is they are due to pay whatever the tomlin order states, if they made a mistake, its for them to go back to court and change the order, not for you to repay them until ordered to.

If they paid you gross, that’s their tough luck. What you do is declare it on your self assessment as gross with no cis deduction. Hmrc is a matter between them and not you.

Hi Paul,

Thanks for the response.

I have a solicitor onto it and I am very much of the opinion that the issue is theirs as had they paid their bills on time (or even within a few months) then I wouldn’t have had to go to court for the petition then Tomlin and PG.

All previous chasing of the debt (and figures given) was done with the CIS deductions included, however, when it got to giving the information for the petition to be signed off and approved by the Judge I was instructed to submit the gross amounts as technically this was the full invoice amounts due and at this point it was in the legal process.

If cis wasn’t taken at source, but paid gross, you would be responsible for paying the tax on it, rather then the company.

So in theory, you would enter the payments received as gross, no cis deducted at source on your tax return.

The company paying doesn’t lose out, as they now don’t have to pay their side.

However, your solicitor may say differently.