im in an active iva which is going well

[pdb]

im in an active iva which is going well im self employed and have just recieved note from the inland revenue that i have over paid £3000 in income tax . this has been sent to the company running my iva and they going to distribute it to my creditors is this lawful as i need the overpayment to finance my work ie buying tools and fuel and other work related outlay as this overpayment was from my expenses from the pass two yrs if they take this from me i wont be able to continue paying at the amount that was agreed

[kallis3]

Hi,

I'm not sure about what happens with tax refunds. One of the professionals should be along to help soon.

In the meantime, have you spoken to your IP to explain that you need to buy work related stuff?

[Michael Peoples]

This depends on when the rebate actually relates to. If it is for a year pre IVA then the money is a windfall as the debts were incurred around this time and they would have been less had you not overpaid tax. If the rebate is post IVA and you are operating under the Construction Industry Scheme the money should be paid to you as it is needed for paying accountants, repairs, tools etc which are items listed in the projected profit and loss and the money is accounted for in cashflow projections.

When did you enter your IVA and why is there a rebate?

[plasticdaft]

I take it you expected the refund? Given that without it you will struggle. Wasnt this sorted out at the start of the IVA?

[pdb]

This depends on when the rebate actually relates to. If it is for a year pre IVA then the money is a windfall as the debts were incurred around this time and they would have been less had you not overpaid tax. If the rebate is post IVA and you are operating under the Construction Industry Scheme the money should be paid to you as it is needed for paying accountants, repairs, tools etc which are items listed in the projected profit and loss and the money is accounted for in cashflow projections.

When did you enter your IVA and why is there a rebate?

[pdb]

This depends on when the rebate actually relates to. If it is for a year pre IVA then the money is a windfall as the debts were incurred around this time and they would have been less had you not overpaid tax. If the rebate is post IVA and you are operating under the Construction Industry Scheme the money should be paid to you as it is needed for paying accountants, repairs, tools etc which are items listed in the projected profit and loss and the money is accounted for in cashflow projections.

When did you enter your IVA and why is there a rebate?

the iva was entered into signed and started in the 8th month of 2008 the tax returns are from the yrs 2007/08 and 2008/09 my repayments were sorted out on the rate of pay i was earning at the time as im self employed in the construction industry and i travel where the work is an allowance of £40 per week as given to me for diesel where in fact i was paying £120 a week for diesel for over 5 months after submitting my account i managed to regain £3000 back from my expenses tools materials etc etc but the iva have instructed the inland revenue that any overpayments be paid to them under a clause 79 which after reading my contract that i signed there is no clause 79 im totally confused been trying to contact them for several days but cant talk to anyone as of yet

[Michael Peoples]

Your IP is referring to Clause 79 of the R3 Standard Terms and Conditions which does state that repayments are offered to the supervisor for the benefit of creditors. You should have received a copy when you entered your IVA but it is a rather big document so you may not have fully read or understood it.

Any rebate from 07/08 is due to creditors as they funded the shortfall in your income at this time. Since you entered your IVA in August 08 you did incur approximately seven months post IVA expenses so there may be an argument that you could be entitled to a proportion of the rebate for that year.

You will need to discuss this with your IP as it will only be a problem year on year after you have submitted your CIS vouchers. I do not believe any further rebates are windfalls as the CIS scheme is effectively a savings scheme whereby any extra savings over and above your tax liability are returned to you to pay other outgoings as listed on your projected profit and loss or cashflow statement.

Did your IP do a cashflow projection taking into account the projected rebate from the CIS vouchers because if so it will plainly show what the money is to be used for?

[pdb]

Your IP is referring to Clause 79 of the R3 Standard Terms and Conditions which does state that repayments are offered to the supervisor for the benefit of creditors. You should have received a copy when you entered your IVA but it is a rather big document so you may not have fully read or understood it.

Any rebate from 07/08 is due to creditors as they funded the shortfall in your income at this time. Since you entered your IVA in August 08 you did incur approximately seven months post IVA expenses so there may be an argument that you could be entitled to a proportion of the rebate for that year.


they didnt do a cashflow projection just asked what i was earning and
You will need to discuss this with your IP as it will only be a problem year on year after you have submitted your CIS vouchers. I do not believe any further rebates are windfalls as the CIS scheme is effectively a savings scheme whereby any extra savings over and above your tax liability are returned to you to pay other outgoings as listed on your projected profit and loss or cashflow statement.

Did your IP do a cashflow projection taking into account the projected rebate from the CIS vouchers because if so it will plainly show what the money is to be used for?

they didnt do a cashflow projection just asked what i was earning and what my general outlays were and from that they told me what i could have for my expenses and what was left from my wages they said would be payable to my creditors i have been earning £500 per week as work is very scarce and hard to come by my contract im on now is ending i have a job lined up but need specialist tools for it and without this rebate i cant afford to buy them so no job i pay £325 per month my creditors are getting 40p in the pound cis vouchers no longer exisit tax is stopped at source and i have to reclaim it back for my expenses ie fuel telephone tools materials workclothing etc etc

[kabby3]

Hi I had a tax rebate not as much as yours but after 6 months going from office to office and eventually my tax office spoke to my IP and decided it was mine to keep. maybe you should get them to talk to one another. They will check you dont owe them money currently, as they will use this refund to cleear any debts to HMRC. x they checked regarding refunds and clause 79 mine didnt have it !

[pdb]

Your IP is referring to Clause 79 of the R3 Standard Terms and Conditions which does state that repayments are offered to the supervisor for the benefit of creditors. You should have received a copy when you entered your IVA but it is a rather big document so you may not have fully read or understood it.

Any rebate from 07/08 is due to creditors as they funded the shortfall in your income at this time. Since you entered your IVA in August 08 you did incur approximately seven months post IVA expenses so there may be an argument that you could be entitled to a proportion of the rebate for that year.


they didnt do a cashflow projection just asked what i was earning and
You will need to discuss this with your IP as it will only be a problem year on year after you have submitted your CIS vouchers. I do not believe any further rebates are windfalls as the CIS scheme is effectively a savings scheme whereby any extra savings over and above your tax liability are returned to you to pay other outgoings as listed on your projected profit and loss or cashflow statement.

Did your IP do a cashflow projection taking into account the projected rebate from the CIS vouchers because if so it will plainly show what the money is to be used for?

they didnt do a cashflow projection just asked what i was earning and what my general outlays were and from that they told me what i could have for my expenses and what was left from my wages they said would be payable to my creditors i have been earning £500 per week as work is very scarce and hard to come by my contract im on now is ending i have a job lined up but need specialist tools for it and without this rebate i cant afford to buy them so no job i pay £325 per month my creditors are getting 40p in the pound cis vouchers no longer exisit tax is stopped at source and i have to reclaim it back for my expenses ie fuel telephone tools materials workclothing etc etc

The letter sent was to confirm that all returns were in the process of being submitted to enable HMRC to calculate their claim. We have in fact now received confirmation from HMRC that there is an overpayment on your account. We have also received this amount by way of cheque.

The tax overpayment, calculated at approximately £2,000 will be brought into your arrangement for the benefit of your unsecured creditors. This amount is considered a windfall of the arrangement and therefore will be introduced in full, without altering your regular voluntary contributions. I highlight below the part of the proposal that relates to this matter in particular.


Windfall Provision



10. If during the term of the IVA I should inherit or receive, or become entitled to any asset in the circumstances envisaged in condition 27(1) of the appended Standard Terms and Conditions, my interest in such asset(s) will be realised in order to meet the liabilities under this arrangement, and will not release me from any other obligations I have under this proposal. For the avoidance of any doubt this would include any windfall, settlement, gaming or lottery win, I shall within 28 days inform my Supervisor and such assets are to be made available for the benefit of creditors up to the value of the total debts plus statutory interest plus any outstanding expenses. This will not relieve me of any other obligations I have under the terms of this proposal.



At the time of the arrangement you may not have been aware of this amount being due to you and therefore, as stated above, this is a windfall and should not affect your ability to pay your monthly voluntary contributions. For the benefit of your creditors and as part of the proposal, any lump sum payment, windfall, asset or inheritance you become entitled to during the arrangement is to be introduced as an added asset into the arrangement to help reduce as much of your debt as possible.

this is the reply i have recieved from them im in contact with them now and ill keep u posted ty for your help and advise

[kabby3]

Heh you know what I havent got that clause or any reference to it!!! So going to def win this weekend xx

[pdb]

Heh you know what I havent got that clause or any reference to it!!! So going to def win this weekend xx

well apparently its a standard clause in every iva agreement hidden somewhere in the big document

[Michael Peoples]

I am totally confused as clause 79 is not what you quoted. Clause 79 specifically relates to tax rebates and not windfalls. You seem to be employed and not self employed and there is a CIS system for the self employed that replaced the voucher system. You say that tax is stopped at source so if you are employed any rebate relates to when you were self employed and your IP is correct in taking it.

If you now are moving to a new contract which might or might not be on a self employed basis and you require specific tools to be considered for the job then either the employer provides those tools or you can ask your supervisor for a variation. Creditors may allow you to keep some.

[pdb]

I am totally confused as clause 79 is not what you quoted. Clause 79 specifically relates to tax rebates and not windfalls. You seem to be employed and not self employed and there is a CIS system for the self employed that replaced the voucher system. You say that tax is stopped at source so if you are employed any rebate relates to when you were self employed and your IP is correct in taking it.

If you now are moving to a new contract which might or might not be on a self employed basis and you require specific tools to be considered for the job then either the employer provides those tools or you can ask your supervisor for a variation. Creditors may allow you to keep some.

i am self employed i have been self employed for 31 yrs i am not paye anyone who employs me has to stop 20% of my wages for tax and i when i do my accounts i have to apply for my own expenses etc etc i have the cis tax certificate the clause i quoted to you was copied from an email that my iva ip sent me trying to explain things to me thats why im confused to

[Michael Peoples]

You urgently need to speak to your IP as if they do not reimburse anything to you and intend to keep the rebates throughout the IVA then your IVA is flawed and doomed to fail.

As I said before, the CIS scheme is effectively a savings scheme to minimise the amount due when the returns are submitted. You are therefore entitled to have any excess returned to you to pay the bills listed on your profit and loss or cashflow projections.

If you were being paid gross and had an exemption card it is good avice to put aside 20% into a savings account for when the tax falls due. Your supervisor would not be entitled to any money left over in that account after the tax has been paid so is not entitled to post IVA rebates under the CIS scheme.

Give your supervisor a list of expenses you need to pay and ask for the money. In addition get confirmation that any further rebates will be returned to you in full otherwise you cannot maintain the payments as the IVA is flawed.

Who is the IP company?