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HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
, see all updates

Supporting Guidance: employer compliance: guidance by subject: penalties: CIS from 06-04-07 - providing false information for registration purposes

A subcontractor must provide certain information when applying to be registered for

  • payment under deduction or
  • gross payment.

S72 FA2004 provides for a penalty not exceeding £3,000 if

  • a false statement is made or
  • a false document is furnished

for the purposes of becoming registered for payment under deduction or gross payment, and

  • it is false in a material particular
  • and the subcontractor
  • knew it to be false or,
  • made or furnished it recklessly.

Registration for Gross Payment

Where a subcontractor is registered for gross payment you may discover that a false statement has been made or a false document furnished when considering whether the Business, Turnover and Compliance Tests have been satisfied. COG910030 - Registering for the scheme.

You must

  • establish the reasons why false information was provided COG906110 and
  • whether the application for gross payment would have been successful had the correct information been provided.

In cases where you establish that the application for gross payment would have been unsuccessful you must

  • consider cancellation of gross payment COG910110
  • send a memo to the relevant Business Team detailing the problems identified and action taken and
  • consider a penalty under S72 FA2004 (see below).

In cases where you establish that the application for gross payment 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.

Registration for payment under deduction

Where a subcontractor is registered for payment under deduction any false statements or documents are likely to be related to the identity of the subcontractor.

Where you identify a false statement or document in connection with an application for registration for payment under deduction you must

  • establish the reasons why false information was provided COG906110 and
  • whether the application for payment under deduction would have been successful had the correct information been provided.

In cases where you establish that the application for payment under deduction would have been unsuccessful you must

  • consider de-registering the subcontractor
  • send a memo to the relevant Business Team detailing the problems identified and action taken and
  • consider a penalty under S72 FA2004 (see below).

In cases where you establish that the registration for payment under deduction 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 you can

TAA will provide guidance on the appropriate amount of penalty to be sought.