The Scheme: payments: small payments arrangement - examination of application
This action guide explains what you should do on receipt of an application to adopt the small payments arrangement.
- Examine your file or any other information to hand to determine whether the applicant is a mainstream contractor or a deemed contractor (see CISR12040 and CISR12050).
* If the applicant is a mainstream contractor, send a letter saying that you are unable to approve adoption of the small payments arrangement because the contractor is not eligible under SI2005/2045 reg 18. * If the applicant is a deemed contractor go to step 2.
- Examine the applicant’s Scheme compliance history.
* If the contractor compliance history is unsatisfactory send a report with your file to the CIS Technical Team ([CISR97090](https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr97090)). * If the contractor compliance history is satisfactory go to step 3.
- Write to the deemed contractor
* specifying the date from which the arrangement will operate * warning the contractor that any abuse of the arrangement will lead you to withdraw approval.
- In addition, ask the contractor for a letter
* agreeing the terms set out * undertaking to ensure that work, which would normally form one contract, is not artificially broken down into a number of contracts, each under £1,000, in order to avoid applying the Construction Industry Scheme.
When the contractor’s letter of agreement is received retain this in accordance with departmental retention policy.