CISR16110 - The Scheme: primary legislation: section 66

This section sets out the circumstances in which a registration for gross payment may be cancelled.

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)

HMRC may cancel gross payment 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) in connection with any obligations under the scheme: FA04/S66 (1)(b), or
  • there is a failure to comply with any obligations arising under, or in connection with any provision of the scheme: FA04/S66 (1)(c)

The registration may be cancelled with immediate effect:

FA04/S66 (4) where the Commissioners have reasonable grounds to suspect that a subcontractor registered for gross payment status:

  • became registered using false information: FA04/S66 (3)(a)
  • has fraudulently made an incorrect return or has fraudulently provided incorrect information (whether as a contractor or subcontractor) in connection with a CIS, PAYE, ITSA, CTSA or VAT obligation: FA04/S66 (3)(b)
  • knowingly failed to comply with an obligation arising under, or in connection with the provision of the scheme: FA04/S66 (3)(c), or
  • where FA04/S62A (see CISR16072) or FA04/S62B applies (see CISR16073): FA04/S66(3A).

On cancelling a registration for gross payment under this section the Board must without delay, 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 status is cancelled under FA04/S66 (3) or FA04/S66(3A), the Commissioners can use their own judgement as to whether registration for payment under deduction is appropriate: FA04/S66 (7).

If gross payment status is cancelled in line with FA04/66(4) they cannot re-apply for gross payment status within one year of the cancellation taking effect (see subsection (2) and section 67(5)).

If a subcontractor's gross payment status is cancelled immediately in line with FA04/66(4) of this section they cannot re-apply for gross payment status within one year of the cancellation taking effect if the behaviour leading to the cancellation arose prior to 06 April 2026. If the behaviour leading to the cancellation arose on or after 06 April 2026 they cannot re-apply for gross payment status within five years of the cancellation taking effect.

FA04/S66 (9) allows 'a prescribed period' to be defined in regulations. See Regulation 26, SI2005/2045.