Michael Peoples wrote:your not going to believe this i just got an email from my ip stating that they do not know what the cis tax system is and they are supposed to be a corperate restructing company they are MCR corporate restructuring i was referef to them by another debtadvice company as i was self employed they told me they couldnt handle me and passed me over to these clowns ty for help its greatly appriciated
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?
Michael Peoples wrote:they suggested i borrow money from my future employer to buy the tools i need i dont think that is a good idea as it was borrowing money in the first place that got me in this mess iv contacted them and my ip is going to refer it to her manager to see what is going on iv told her iv lost confidence in her company and thier ability to handle my affairs and that the iva is possibly flawed . i have to wait till monday now to see if they understand the cis tax system thanks again
Glad to hear it PDB. Maybe if you can speak directly to them they may back down and refund all the money if they do not know what the CIS scheme is. Sorry about the earlier confusion but I think that we got there in the end. Let me know the next episode.
Michael Peoples wrote:ok just spoken with ip and she is still adamant they are going to take all my tax rebates for the term of the iva she has however said i could have a holiday from payments as things were getting tight ( very nice of her seeing as she has taken over £6000 off me in ten months ) apparently inland revenue pay all my rebates to them as all my tax is payed in advance and my expenses should have been accounted for in my profit loss sheet so now im lost im going to have £1500 tax rebate taken off me for the duration of the iva plus £324 a month seems things aint going my way i asked about an F&F and was advised as im paying 40p in the pound my creditors would be looking for someting like 30p in the pound for a F&F looking at what i might be paying back i think this is the better option if i can find a third party to help me out things dont get any better thanks for yopur help
Are you sure you have been speaking to the IP? The IPs are the bosses so why would it need referred to a manager? Ask why there were no cashflow projections prepared and why was a proposal drafted that had a basic and fundamental flaw. If you were referred to them as they have specialist knowledge of self employed how is that they do not know of the Construction Industry Scheme which covers probably the biggest single group of self employed in the country! Most IPs like our firm are also Chartered Accountants which is helpful when dealing with businesses and the self employed but this a very basic issue that should be quickly addressed.
Michael Peoples wrote:they did do a profit and loss sheet but without my knowledge iv seen it now, and my fuel allowance is pitiful £65 a month im going to send her a total break down of my expenses and she said she will see if i can get a reduced payment i dont think im being unreasonable asking for my rebates to be honest im out of my depth here i just tihnk im being very hard done by by having £6000 taken from me when my profits for the yr after working very hard mounts to £14,000 per annum i will contact the inland revenue to discuss with them but after what she said about its how the they pay any rebates they have to be added to my iva account as i have already paid my tax for the yr this is deemed as a windfall she did quote item 79 of the standard iva agreement but im affraid its going right over my head
Do not give up on this. Your profit and loss includes allowances for petrol, insurances, repairs renewals, accountancy etc and if you do not get the rebates during the IVA it is fatally flawed.
Advise your IP that you will be contacting HMRC for clarification. Also advise that the IVA has been defective from the beginning and you wish to know the company grievance procedure. This is a basic cashflow problem that would not have occurred had the IP prepared a cashflow projection at the outset. A profit and loss is fine provided the IP allows the expenses to be paid!!!
Michael Peoples wrote:ok quick update had a convo with ip shes adamant the tax rebate is a windfall however i told her i hadnt seen or sorted a cashflow chart with her and i did one taking into account all my expenses to the penny and after giving her my total pay for the tax yr 08/09 she has said it looks like i donot have any disposable income i did ask her in that case would i be getting my rebate back she said probably not as its still a windfall ?
She is missing the point. The relevant part of clause 79 of the standard terms and conditions concerning post IVA rebates states that;
'Any repayments for any later periods shall be offset against any post approval debts due to Inland Revenue or Customs and Excise. Any remaining surplus will then be treated as a windfall and offered to the Supervisor for the benefit of creditors.'
The main word is 'offered'. The Supervisor can advise HMRC to return the monies to the debtor as it had been accounted for in the profit and loss and cashflow projections. Just because HMRC treat it as a windfall does not mean that it is.
This situation is crazy. You are obliged to submit your returns to HMRC but you have no incentive to list your expenses as you are not being allowed to offset them against the CIS deductions. Why pay an accountant or claim anything at all if your IP is just going to take the money?
Tell your IP that you need to do a cashflow projection. This will show that you have to meet the business expenses from your day to income and as such have no DI. However, she can have the rebate each year as the only payments to the IVA and this would probably achieve the original dividend proposed while leaving you in a position to carry on working. She cannot have the surplus and the rebate or your IVA will fail.
Michael Peoples wrote:she is going through my figures to work out my dispoible income if any and she will get back to me im trying to talk to my tax office if i can get through on the phone see what can be done will let u know what theoutcome is when i hear from her
Ask her to accept the tax rebates as the only payments to the IVA as you have no monthly surplus. This should still achieve the dividend while giving you sufficient monies to keep going. Or she could call a variation to allow you to keep the rebates and make ongoing monthly payments but something will have to be done or your IVA has to fail.
What has she suggested?
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