please help as my iva provider cant give me a straight answer. i am a self employed plumber. i pay tax through the construction industry scheme. i am going to be doing my tax return soon, if i get a tax refund is it classed as a windfall or not, as it is just money i have overpaid to the inland revenue. many thanks, matt.
you can lead a horse to water, but a pencil must be lead
I've no idea on tax crozzle, hopefully one of the experts can pick up on this.
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There should not be any confusion over this at all. It depends upon the way your IP treated your trading projections within the IVA proposal. If they calculated tax at merely 20% of earnings, in the manner that the CIS scheme operates, without giving you credit for deductable overheads, then the refund should be yours to keep. In my own firm, we try and work out the tax correctly in which case the refund forms part of the IVA funds.
Review your proposal documents to see how the tax deductions were originally treated, or ask your IP for specific confirmation.
Hi Crozzle - hopefully Melanie's explanation above will help you to at least identify what to clarify with your IP.
Keep pushing until you do get a clear and confirmed answer so as not to end up in the position of owing money into your IVa at your next review without realising. Any good IP will never leave a client confused, especially as something as important as this.
Let us know how you get on.
Regards, Tina Shortland, Debt Advisory Manager for Melanie Giles at Debt Advice TV.
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Hi and thanks for all the responses. My ip has told me to wait until I receive confirmation from hmrc and forward it onto them. They couldn't just tell me whether the tax refund will be classed as a windfall or not. I have read my proposal and my projected cash flow only has tax deducted from my profit and doesn't allow for the fact I pay tax on all my expenses, which is then refunded when I do my tax return. I would be very grateful if anyone can help as I don't have much confidence in my ip giving me a straightforward answer. Cheers.
you can lead a horse to water, but a pencil must be lead
Hi and thanks for all the responses. My ip has told me to wait until I receive confirmation from hmrc and forward it onto them. They couldn't just tell me whether the tax refund will be classed as a windfall or not. I have read my proposal and my projected cash flow only has tax deducted from my profit and doesn't allow for the fact I pay tax on all my expenses, which is then refunded when I do my tax return. I would be very grateful if anyone can help as I don't have much confidence in my ip giving me a straightforward answer. Cheers.
you can lead a horse to water, but a pencil must be lead
Hi and thanks for all the responses. My ip has told me to wait until I receive confirmation from hmrc and forward it onto them. They couldn't just tell me whether the tax refund will be classed as a windfall or not. I have read my proposal and my projected cash flow only has tax deducted from my profit and doesn't allow for the fact I pay tax on all my expenses, which is then refunded when I do my tax return. I would be very grateful if anyone can help as I don't have much confidence in my ip giving me a straightforward answer. Cheers.
you can lead a horse to water, but a pencil must be lead
Then I would say that the refund is yours to keep, but do check with your own IP as they are best placed to answer this point. If they say the money is to be treated as a windfall ask them to explain their reasons for this decision in writing.
