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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): regulation 13 income tax (construction industry scheme) regulations 2005 - process

COG909390 explains the background and when to consider the issue of a Regulation 13(2) Determination.

You must always consider all the information (COG909370) you hold in respect of possible claims under Regulation 9(3) and (4) for a direction granting relief under Regulation 9(5) prior to the issue of Regulation 13(2) determinations. See also COG909360.

Once a determination has been issued under Regulation 13(2) you will be precluded due to the provision of Regulation 13(3) from considering either an initial claim or further claims under Regulation 9(3) and (4) for a direction granting relief under Regulation 9(5).

This page explains the process to follow when issuing a determination.

Further information can be found at CISR82000 onwards.

Action by CI Caseworker

When the issue of a determination is approved by the manager COG909390 as the most appropriate course of action you should

  • issue the Reg 13 Warning letter (Word 26KB) to the contractor, allowing 30 days for a response CISR82030
  • consider whether formal penalties should be issued at the same time COG914175
  • complete the 310(Z) set within SEES from 1 November 2010, for all determinations under Regulation 13.

If there has been no response to the warning letter you should arrange issue of the Regulation 13(2) determination.

  • Complete the 310(Z) set within SEES from 1 November 2010, for all determinations under Regulation 13.
  • Any determination made on or after 6 April 2007, regardless of the tax year to which it relates (post or pre-6/04/2007), should be made under ‘Regulation 13 of the Income Tax (Construction Industry Scheme) Regulations 2005’.
  • The amount determined as shown on the determination is due and payable 14 days after the determination is made and that date should be entered on the 310(Z) set within SEES.
  • In the ‘Particulars’ box on the determination, the correct description will depend upon the tax year for which you are making the determination, as follows;
  • Tax years from 6 April 2007 to date - the correct description is ‘Failure to make deductions under S61 of the Finance Act 2004’.
  • Tax years before 6 April 2007 - the correct description is ‘Failure to make deductions under S559 (4) of the Income and Corporation Taxes Act 1988’.
  • Any determination already made which shows the incorrect details in the ‘Particulars’ box will not be invalid as made. No action should be taken to vacate and reissue these determination(s) again.
  • Note: a class or classes of subcontractors/trades can be specified in the notice of determination (without naming the individuals), or
  • one or more named subcontractor can be specified in the notice, do not use the term - various subcontractors
  • seek manager authorisation on the templates
  • prepare a SAFE stencil (available via SEES excel>forms and letters>CIS SAFE Reg 13), and
  • forward this to the SAFE officer to process.

Action by SAFE officer

When a request for the issue of a Regulation 13 determination is received you should check that the determination includes

  • the caseworker’s office location
  • the caseworker’s PID
  • the case reference
  • the relevant legislation
  • the year of the determination
  • subcontractors’ names where known
  • the amount on which deductions are chargeable
  • the appropriate rate of CIS deductions

and

  • print the determination and a payslip for issue
  • enter on SAFE under the Regulation 13 category
  • enter the case in the establishments folder
  • issue the determination and payslips
  • issue a copy of the determination to the agent if appropriate
  • complete the SAFE stencil and return to the caseworker.

Further Action by CIS Caseworker

Once the SAFE stencil is returned by the SAFE officer you should

  • make sure a copy of the determination is held in the file
  • b/f the case for any appeals
  • if an appeal is received follow the guidance at COG909390 and COG914175
  • if no appeal is received consider formal penalties COG914175 and close the case.

Action by Manager

The manager should make sure the above processes are correctly followed in order to avoid any unnecessary problems. The manager should also support/guide the caseworker where an appeal is received.

LB

LB Tax Specialists should refer to the LB Employer Compliance Processes Paper for a full description of the processes to be followed.