Supporting Guidance: employer compliance: guidance by subject: penalties: CIS until 05-04-07 - application for a certificate - knowingly or recklessly making a false statement or furnishing a false document
Only subcontractors with a valid certificate could receive payments gross (without CIS deductions). COG909530 - Types of Tax Certificate.
When applying for a certificate a subcontractor had to satisfy the
- Turnover Test (CIS Manual CIS3201)
- Business Test (CIS Manual CIS3301) and
- Compliance Test (CIS Manual CIS3401).
A subcontractor who
- made a false statement or
- furnished a false document
- for the purposes of obtaining a certificate and
- did so knowingly or recklessly
may become liable to a penalty not exceeding £3,000 under S561(10) ICTA 1988.
More guidance can be found in the CIS Manual at CIS3221
Where you identify or suspect that a false statement has been made or a false document provided in order to obtain a certificate and a penalty may be appropriate you should
- establish the reasons why false information was provided COG906110 and
- whether the application for a certificate would have been successful had the correct information been provided.
In cases where you establish that the application for a certificate would have been unsuccessful you must
- consider whether the subcontractor is currently registered for gross payment,
- whether cancellation of gross payment is appropriate COG910110
- send a memo to the relevant Business Team detailing the problems identified and action taken and
- consider a penalty under S561(10) ICTA 1988 (see below).
In cases where you establish that the application for a certificate would still have been successful you must
- provide advice to the subcontractor about the importance of providing correct information on any application for registration and
- send a memo to the relevant Business Team detailing the problems identified and action taken.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000) COG904570(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Where a penalty is appropriate contact TAA Technical for advice - see COG904770.