The Scheme: Primary legislation: schedule 11: part 1
PART 1: Conditions to be satisfied by individuals
- Where an individual is applying for gross payment status as a sole trader they must satisfy the business, turnover and compliance tests as set out at paras 2, 3 and 4 of Schedule 11.
- Where an individual is applying for gross payment status as a partner in a firm, paras 2 and 3 do not apply.
An applicant must provide evidence, as prescribed by the Board in regulations, to showthat they are carrying on a business in the United Kingdom which
- carries out construction operations itself or arranges for others to carry out construction operations, and
- that the business is largely conducted through a bank account.
See SI2005/2045 reg 27.
- An applicant must provide evidence, as prescribed in regulations made by the Board, that their business, in the year following the application, will receive relevant payments at least equal to the minimum turnover requirement specified in regulations. See SI2005/2045 reg 28(1) and 29.
- A ‘relevant payment’ is a payment made under contracts for construction operations carried out by the applicant, or others supplied by the applicant, which fall within the scope of the scheme (FA04/S74 (2)) but not works outside the scope of the scheme (FA04/S74 (3)). In calculating turnover, the relevant payment should exclude the direct cost of materials.
- (3) The Board may make regulations that, in certain circumstances, allow businesses that do not meet the conditions at (1) to be treated as having met the turnover test. See SI2005/2045 reg 31.
- Subject to (3) and (4) below, the applicant must have complied with all their tax obligations and met all requests for information during the qualifying period.
- If an applicant had control of a company during the qualifying the period, they cannot satisfy the conditions in (1) above unless the company can also satisfy those conditions. This sub-section also defines ‘control’.
- An applicant who has failed to comply with obligations under (1) may be treated as having met those obligations if the failures are of a kind prescribed in regulations. See SI2005/2045 reg 32
- An applicant can be regarded as satisfying the conditions in (1) if there is a reasonable excuse for non-compliance and the applicant complied once the reasonable excuse had ended.
- Where an applicant states they have not been subject to one or more of the obligations laid down by (1) they must produce evidence to support that statement, as prescribed in Board regulations. See SI2005/2045 reg 35 and 36.
Where an applicant claims to have been outside the United Kingdom they must produce evidence, as prescribed in Board regulations, to show they have complied with any comparable tax obligations in any country in which they have lived during the qualifying period. See SI2005/2045 reg 33 and 34.
- An applicant must, when due, have paid any Social Security Contributions which became payable during the qualifying period.
- There must be reason to expect that an applicant will continuously comply with the obligations set out in (1) to (6) and any requests referred to at (1).
- This section stipulates that not only must the applicant have met all their tax obligations in full but have also done so on time.