cis gross payment status

the_money_pit

Hi all.
I'm really in need of any advice anyone would have on our situation. My OH has received a letter informing him that he is to lose his gross payment status within 90 days. The reason for this is 2 late payments of self assessment tax in the last 12 months. These payments were made about 8 weeks late in both cases but as they were payments on account this seems a tad unfair!!!!!!
Also as my OH has a number of subbies which he deducts 20% monthly from in the last 12 months every single return and payment (44,000) has been perfectly on time. Does this count for nothing?
The major problem obviously is without the gross payment status the main contractor for whom he supplies labour will no longer be willing to work with him but even if they were the 20% deduction from his gross would be the business cash flow impossible.
I am so sick for him, he is one of the honest ones who does it by the book, pays every penny owed and the taxman is crucifying him.
Any advice would be greatly appreciated.

the_money_pit

anybody???

System

Your OH can appeal the decision. The details of how to do this are usually in the letter stating that gross status is being withdrawn. It will have to be in writing you cannot appeal in a phonecall. However POA have strict dates by which they must be paid basically because the taxpayer is already paying their tax later than a PAYE employee who pays their tax every week or month as the year goes along. Failure to comply is taken seriously.

Get your OH to write in giving reasons for the late payments and hopefully they will relent.

BoGoF

I think HMRC are now clamping down on people who have defaulted. Part and parcel of applying for gross payment status is declaring you will meet all your obligations - paying on time etc. Clearly OH has failed to do so. As has been stated you can appeal but I would doubt very much if you would suceed, after all 8 weeks late is quite a bit late.

Elaine_Wilson

I think you need to concentrate on why the payments were made late. If you can show that it was because of circumstances outside his control you may have a glimmer of hope.

Bear in mind that the regulations allow some leeway and allow HMRC to ignore certain defaults as trivial. They will ignore one default for self assessment tax in the twelve month period. Unfortunately he has had two defaults and considering there were only three payments which became due in the period you can understand why they balk at ignoring this.

Bean_Counter

I'm afraid I have seen several instances of this over the last few months, where as far as I can tell two PAYE payments or self assessment payments have been late. I can understand how dramatic the impact on your cashflow will be and I am now paranoid at getting the the VAT return / PAYE cheque / monthly CIS return / directors tax returns etc all done on time to maintain our gross status. I guess this was HMRC aim!

I have seen one subbie who was changed from gross to net, then about a week or so later changed back to gross (presumably under appeal.)

Good luck with the appeal.

maureen0000

<P> </P>
<P>Hi, just to let you know my husband also received a letter revoking his gross payment status due to late payment of 1st payment on account and balancing payment, however I am appealing this decision as the late payment was agreed with the tax office who said this would have no affect on his gross payment status when it came up for review as a payment arrangement had been made for this payment;He currently had no tax outstanding and has made the last two payments before the due dates. I also feel that he is being unfairly punished despite working 7 days weeks and paying all tax due.