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HMRC internal manual

Construction Industry Scheme Reform Manual

The Scheme: primary legislation: section 66

This section sets out the circumstances in which a registration for gross status may becancelled.

  • The Board may cancel gross status where

    • a registered person would fail to meet the requirements if applying at that time: FA04/S66 (1)(a)
    • an incorrect return or incorrect information is provided (whether as a contractor or subcontractor): FA04/S66 (1)(b)
    • there is a failure to comply with any provision of the scheme: FA04/S66 (1)(c)
  • Where cancellation of gross payment status under FA04/S66 (1) takes place, it will be effective from the end of the period prescribed in regulations: FA04/S66 (2)
  • Where the Board suspects that a subcontractor registered for gross payment status has

    • registered using false information: FA04/S66 (3)(a)
    • has fraudulently made an incorrect return or provided incorrect information (whether as a contractor or subcontractor): FA04S66 (3)(b), or
    • has knowingly failed to comply with the provisions of the scheme: FA04/S66 (3)(c)

the registration may be cancelled with immediate effect: FA04/S66 (4)

  • On cancelling a registration for gross payment under this section the Board must immediately notify the subcontractor giving the reasons for cancellation: FA04/S66 (5)
  • Where cancellation of gross payment status is determined under FA04/S66 (1), the subcontractor must be registered for payment under deduction: FA04/S66 (6)
  • Where a subcontractor’s gross payment registration is cancelled under FA04/S66 (3), the Board can use its own judgement as to whether registration for payment under deduction is appropriate: FA04/S66 (7)
  • If a subcontractor’s gross payment status is cancelled in line with sub-sections (2) and (4) of this section and FA04/S67 (5), they cannot re-apply for gross payment status within one year of the cancellation taking effect: FA04/S66 (8)
  • FA04/S66 (9) allows ‘a prescribed period’ to be defined in regulations. See Regulation 26, SI2005/2045