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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: construction industry scheme (CIS): gross payment registration - referral to functional lead team for withdrawal authorisation

COG909155 gives advice and guidance on when failures identified at the compliance check will lead to a referral by the CI Caseworker to the Functional Lead Team CIS Technical Support for authorisation of the withdrawal of Gross Payment Registration from a subcontractor.

A referral to the Functional Lead Team CIS Technical Support will be for either withdrawal under FA04/S66 (1) with the attendant 90 day notice period or immediate withdrawal under FA04/S66 (3).

Consideration of withdrawal with the 90 day notice period

If you have contacted the Functional Lead Team CIS Technical Support and been advised that withdrawal is appropriate you should now complete the ‘GPS 90 day notice withdrawal’ stencil and email it to the CIS Functional Lead Team.

The Functional Lead Team CIS Technical Support will confirm acceptance of the case and which Technical Officer is dealing with it. The FLT may subsequently request your file papers.

The Functional Lead Team CIS Technical Support will consider the submission and authorise the withdrawal, notify the contractor by issuing a manual CIS308 and deal with any subsequent appeal.

Your file papers will be returned to you once notification of withdrawal, CIS308, has been issued to facilitate progression of any other issues in your case.

Consideration of immediate withdrawal

If you have contacted the Functional Lead Team CIS Technical Support and been advised that withdrawal is appropriate you should now complete the ‘GPS immediate notice withdrawal’ stencil and email it to the CIS Functional Lead Team

The Functional Lead Team CIS Technical Support will confirm acceptance of the case and which Technical Officer is dealing with it. The FLT may subsequently request your file papers.

The Functional Lead Team CIS Technical Support will consider the submission and authorise the withdrawal, notify the contractor by issuing a manual CIS308 and deal with any subsequent appeal.

Your file papers will be returned to you once notification of withdrawal, CIS308, has been issued to facilitate progression of any other issues in your case.

Once the Functional Lead Team CIS Technical Support has issued the relevant withdrawal notice you should refer any subsequent contact from the contractor or authorised agent direct to the FLT Technical Support Officer.

Compliance Revenue Claiming

In cases where withdrawal is confirmed the compliance revenue can be claimed in the appropriate Caseflow settlement screen.

You should note however that where a 90 day notice cancellation is involved any appeal has the effect of restoring the gross registration pending the outcome of the appeal. You will not therefore be able to claim the compliance revenue until the new effective date of cancellation is known (a further 90 days) from the date the appeal is finalised.

Immediate Cancellation

The basis of the compliance revenue calculation is:

  1. Calculate the number of months (X) from the date of immediate GPS removal to the date of the next scheduled TTQT.
  2. Calculate the average monthly Gross payments (Y) received from the date of the last TTQT to the date of immediate GPS removal.
  3. Calculate the Number of Months (X) x Average Monthly Gross Payment (Y) = gross payments effectively stopped (Z).
  4. Calculate the potential CIS deductions saved = gross payments effectively stopped (Z) @ 20% = compliance revenue.

An example is as follows:

Date of last TTQT 01/09/2009
   
Date of next scheduled TTQT 01/09/2010
GPS removed 07/12/2009

 

    1. X = 9 months of gross payments effectively stopped (07/12/2009 - 01/09/2010)
      1. Y = 3 months (06/09/2009 - 05/12/2009) and as gross payments of £300,000 received the average monthly payment = £100,000
      2. X x Y = 9 x £100,000 = £900,000
      3. Compliance revenue = £900,000 @ 20% = £180,000

90 day notice cancellation

The basis of the yield calculation is:

  1. Calculate the number of months (X) from the effective change date (90 days from cancellation decision date) to the date of the next scheduled TTQT.
  2. Calculate the average monthly Gross payments (Y) received from the date of the last TTQT to the effective date of GPS cancellation.
  3. Calculate the Number of Months (X) x Average Monthly Gross Payment (Y) = gross payments effectively stopped (Z).
  4. Calculate the potential CIS deductions saved = gross payments effectively stopped (Z) @ 20% = compliance revenue.

An example is as follows:

Date of last TTQT 01/09/2009
   
Date of next scheduled TTQT 01/09/2010
GPS removed (effective 90 day date) 07/12/2009

 

  1. X = 9 months of gross payments effectively stopped (07/12/2009 - 01/09/2010)
  2. Y = 3 months (06/09/2009 - 05/12/2009) and as gross payments of £300,000 received the average monthly payment = £100,000
  3. X x Y = 9 x £100,000 = £900,000
  4. Compliance revenue = £900,000 @ 20% = £180,000

 

The Functional Lead Team CIS Technical Support HO will assist in such cases in the calculation of the compliance revenue.