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HMRC internal manual

Construction Industry Scheme Reform Manual

HM Revenue & Customs
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The Scheme: primary legislation: schedule 11: part 2

PART 2: Conditions to be satisfied by firms

Para 5:

Where an individual or company wishes to apply to be registered for gross paymentstatus as a partner in a firm, the following conditions must be met.

Para 6:

Applicants must provide evidence, in accordance with Board regulations, to show thatthe firm’s business is carried on in the United Kingdom; that it carries outconstruction operations itself or arranges for others to carry out constructionoperations, and that the business is largely conducted through a bank account. SeeSI2005/2045 reg 27.

Para 7:

  1. Partners must provide evidence, as prescribed in regulations, to show that they expect the firm to receive, in the year following application, relevant payments totalling not less than the multiple turnover threshold or the amount specified in regulations. ‘Relevant payment’ has the meaning given in Para 3(2) of Part I to this Schedule. See SI2005/2045 reg 28(2) and 29.
'Multiple turnover' threshold means the amount obtained by multiplying the number of individual partners in a firm or company by the minimum turnover set out in Para. 3(1) of Part I to this Schedule
  1. Where the number of partners in a firm has fluctuated over a period of time, regulations may be made allowing the Board to determine the number of partners to be taken into account for the purposes of the test. See SI2005/2045 reg 30.
  2. The Board may make regulations that, in certain circumstances, allow firms that do not meet the conditions at (1) to be treated as having met the turnover test. See SI2005/2045 reg 31.

Para 8:

  1. Unless covered by sub-sections (2) and (3) below, all those who are partners in the firm at the time of the application must have complied with all their tax obligations and met all requests for information during the qualifying period.

  2. A firm can be treated as meeting the compliance obligation in respect of any partner where that partner’s failures are of kind set out in regulations made by the Board. See SI2005/2045 reg 32

  3. A partner can be regarded as satisfying the conditions in (1) if there is a reasonable excuse for non-compliance and the partner complied with the obligation once the reasonable excuse had ended.

  4. There must be reason to expect that partners in the firm will continuously comply with the obligations and requests set out in (1).

  5. This paragraph stipulates that not only must all partners in the firm have met all their tax obligations in full but must also have done so on time.