CISR16072 - The Scheme: primary legislation: section 62A

This section explains when an officer can determine that a person is liable to pay an amount where they knew or should have known there would be a deliberate failure to deduct or pay CIS or PAYE by the person receiving the payment or by another party in the supply chain.

An HMRC officer may determine that the payer is liable to pay 20% of the payment made under the construction contract (FA04/S62A (2)) where

  • A person has made a payment under a construction contract: FA04/S62A(1)(a)
  • Before they made the payment, they knew or should have known that a connected party had deliberately failed, or would deliberately fail, to make a CIS deduction or pay a CIS deduction to HMRC or deduct or pay any PAYE liabilities: FA04/S62A(1)(b). 

A connected party is another party to the same construction contract, or a party to a different construction contract relating to the same construction operations: FA04/S62A(3).