HMRC tax agent strategy - CIS repayments

My practice has received a letter under the HMRC strategy concerning "expenses larger than would be expected" for CIS sub contractors.  Frankly I am quite astonished.

I had been informed at a briefing by HMRC that the strategy was to weed out those agents who set themselves up to bulk process tax returns for subbies.  I have always considered myself very conservative when claiming expenses for CIS sub contractors.

I consider they fall into two categories.  Those who offer almost labour only where it would be very creative to find any expenses to claim and those who are just running a "proper" self employed business and who happen to work for larger contractors who fall under the CIS arrangements.

Having checked several of the clients (as advised by HMRC's letter) I find that the majority are businesses with the full range of expenses expended who just happen to do some work for often labour-only contracts with larger contractors.

On top of the amazing delays and aggravation in trying to get CIS overpayments repaid, I find any goodwill left in dealing with HMRC to be evaporating quickly.

Are these "threatening" letters more widespread than HMRC will admit  ? 

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