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HMRC internal manual

Construction Industry Scheme Reform Manual

The Scheme: payments: small payments arrangement - examination of application

CISR15000 Information contents

This action guide explains what you should do on receipt of an application to adopt the small payments arrangement.

  1. 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.
  1. 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](
* If the contractor compliance history is satisfactory go to step 3.
  1. 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.
  1. 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.