HMRC Self assessment repayment and IVA

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qucharski
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by qucharski » Sun Apr 23, 2017 3:47 pm
Hi,
Hope I can get some help here. I'm on IVA but doesn't apply to me just asking on someone else's behalf as they are self employed on IVA. So they done self assessment and are due a refund. When he signed up for IVA been told any repayments won't be due to them as it's business capital or something like that yet HMRC is on list of creditors even though there is no debt to them? Now they asking for this repayment and hmrc is delaying this saying his on iva and need to speak to iva company and they are scared they won't get the money. they didn't include business expenditure in their budget as this repayments cover it.
Just not sure how it works anymore and me being on normal iva can't help him as never had that issue
Company is Payplan
Thank you for any answers
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Foggy
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by Foggy » Sun Apr 23, 2017 4:48 pm
One of the joys of being with an IVA factory --- no definitive assistance when things get awkward. I know we have a few industry experts who post, mainly weekdays, and are experienced with self employed and HMRC. Hopefully one will comment tomorrow.
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qucharski
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by qucharski » Sun Apr 23, 2017 5:02 pm
Thank You.
I guess will have to wait patiently :)
It's not urgent this moment but will be during the weeks to come unfortunately :(
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Michael Peoples
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by Michael Peoples » Mon Apr 24, 2017 8:43 am
I assume the person is involved in construction and gets an annual rebate. This is working capital and should be reimbursed which is what we do. Our proposals specifically exclude the rebates but if they are not excluded HMRC must treat them as windfalls and offer them to the supervisor of the IVA. The supervisor can decline the money and pay it back to the client if they understand what they are doing.

If the person is in construction then HMRC should not have been included as a creditor anyway as enough is deducted at source to cover any liability so your friend needs to have a word with the IP and find out exactly what is going on.
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qucharski
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by qucharski » Mon Apr 24, 2017 5:31 pm
Thank you thats very helpful!
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Michael Peoples
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by Michael Peoples » Tue Apr 25, 2017 8:23 am
Let us know what happens next as I would be curious to know.
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qucharski
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by qucharski » Tue Apr 25, 2017 8:39 pm
He spoke to them and said this is bussines capital and apparently hmrc must be on the list for the first year but repayment should be send to him. But as usual it will take time until hmrc speak to them etc. Let's hope that will be the end of it but I'll update once know anything
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Foggy
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by Foggy » Wed Apr 26, 2017 7:06 am
qucharski wrote:
He spoke to them and said this is bussines capital and apparently hmrc must be on the list for the first year but repayment should be send to him. But as usual it will take time until hmrc speak to them etc. Let's hope that will be the end of it but I'll update once know anything


HMRC are usually included for self employment outside of the construction industry, because you will be building up a tax liability during that first year. However, in the construction industry 30% is deducted at source and the excess refunded to you at the end of the tax year -- so, in theory, you never build up any liability, so there is no need for them to be involved, so I believe. It has been many years since I was involved in SC60's and the like, so things might have changed.
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Michael Peoples
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by Michael Peoples » Wed Apr 26, 2017 8:17 am
SC60s Foggy! You are showing your age.

HMRC are entitled to offset any rebate against outstanding debts owed to them but if someone is operating under the CIS scheme then it is rare that they would have any liability as it would normally be covered by deductions. At least the IP agrees that the rebate is working capital and will allow it to be returned but HMRC will likely send it to the IP so lets hope they do not decide to just keep it.
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Foggy
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by Foggy » Wed Apr 26, 2017 8:25 am
Michael Peoples wrote:
SC60s Foggy! You are showing your age.

HMRC are entitled to offset any rebate against outstanding debts owed to them but if someone is operating under the CIS scheme then it is rare that they would have any liability as it would normally be covered by deductions. At least the IP agrees that the rebate is working capital and will allow it to be returned but HMRC will likely send it to the IP so lets hope they do not decide to just keep it.


Michael -- the last time I had any dealings with the construction industry in any professional capacity they were still using dinosaurs to do the groundworks !
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