CIS and common sense

We have recently dealt with a peculiar problem for one of our construction industry scheme (CIS) clients that may be of wider interest.

We were instructed by a client in the construction industry whose application for gross payment status has been refused by HMRC. The grounds for refusal are that each of the two partners had paid their self assessment tax instalments which were due on 31 January 2007 late. A review turned up that each partner had actually paid their instalments on 27 January 2007 but as is fairly typical a small balance (£4.33 and £5.96 respectively) remained outstanding on each account. Their statements issued on 22 February 2007 included the text: 'The amount to pay is small. If you do not wish to pay this now it will be added to your next statement but you may be charged interest if you pay late'.