HMRC Withholding payment

[Hoody03]

Hi there

 

I wonder if any one can give me aliitle advise, because the IR scare me a little.

 

My husband is self employed and I do his accounts & tax return. I always submit his tax return at the very start of the tax year and with him being part of the CIS scheme he always pays to much tax and always get his refund within 4 weeks.

 

Back in January we received a letter from the IR with regards to his 14/15 tax return, they stated there was a CIS mis-match, which is the case every year as our accounts are on cash accounting and our year year is the 31st March. So becasue of this they wanted an explanation and paper work and also detailed breakdowns and copies of all figures declared on the tax return.

 

What a nightmare, as he is a small sole trader he still has an awful lot of paperowkr for the year. Anyway I sent them through the explanation of why the mis-match occured and copy remits. I also sent them an itemised breakdown of all the figures (expenses) on the tax return.

 

A few weeks later another letter came, obviously what I sent expenses wise what not good enough and wanted copies of absolutely everything, full years bank statement, fuel invoices, purchase invoices and so on. This was basically a full lever arch file, so with not having the time or resources to copy this I ended up sending all original through to them with the additional information they required (which cost me nearly £16).

 

So going forward I submitted 15/16 return on 6th April which the calculation stated my husband had made an over payment of over £10,000. It states an overpayment is normally made within 2 weeks but not to contact them until 4 weeks. Well 4 weeks is here and my husband has rang them and the payment is getting with held because of the previous years equiry.

 

I feel I have been very helpful in the aid of their enquiry but just dont trust them. I feel they are goind to look for errors which I only declare actual figures used for the business but some questions they were asking me were ridiculous, ie mobile phone contract? mileage (which we dont keep as the vehicles used for the business are just for the business) MOTS.

 

Hope you can make head & tails of this, I would appreciate anyone help & guidance.

 

Thanks

Hoody x

[slick132]

Hi Hoody and sorry for the delay in responding to your post.

 

I suggest there are 2 possibilities here :-

 

1. The initial discrepancy re CIS deductions has drawn attention to YH's tax return for the year ended 5th April 2015 and HMRC have decided to look at the return in greater detail. As a matter of course, this would involve asking for copies of receipts, invoices, bank records, etc.

 

2. YH was randomly selected for an in-depth review of the tax return.

 

Did YH receive a refund of tax win April or May of 2015.

 

Whatever triggered the review, you need to comply as far as possible. It may be that YH is also required to attend an interview at a local HMRC office.

 

Unless you are reasonably confident about handling this matter yourselves, you may consider taking advice from an accountant or tax adviser. You could also take a step further and engage them to handle the tax return enquiry on your behalf but YH would still need to attend an interview if HMRC requested this.

 

You could ask around for a professional who is recommended by friends or family. This is far better than finding someone unrecommended.