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HMRC internal manual

Construction Industry Scheme Reform Manual

The Scheme: secondary legislation: SI2012/820

This Statutory Instrument amends Reg 2, Reg 8, Reg 32, Reg 45 and Reg 56 SI2005/2045 and the revised text for each is as shown below. These amended Regulations apply only from 6 April 2012, and should be read in conjunction with the Income Tax (Pay As You Earn) (Amendment) Regulations 2012 (SI2012/822) which allows for the introduction of Real Time Information (RTI);

Regulation 2 (Interpretation)

The definition of ‘student loan regulations’ has been amended and now reads;

“Student Loan Regulations” means the Education (Student Loans) (Repayment) Regulations 2009 or, in Northern Ireland, the Education (Student Loans) (Repayment) Regulations (Northern Ireland) 2009;”.

Regulation 8 (Quarterly tax periods)

The definition of ‘P’ and ‘L’ in paragraph 3 has now been amended and now reads;

P is the amount which would be payable to an officer of Revenue and Customs under regulation 67G or 68 of the PAYE Regulations (periodic payments to and recoveries from the Revenue);

L is the amount which would be payable to an officer of Revenue and Customs under regulation 54(1) or, in Northern Ireland 49(1) of the Student Loans Regulations (payment of repayments deducted to the Commissioners for Her Majesty’s Revenue and Customs) disregarding the reduction referred to in paragraph (3) of that regulation;

Regulation 32 (Exceptions from compliance obligations)

Table 3 has been amended in respect of the obligation to submit a return under PAYE regulations, the revised entry in the table is as follows:

1. Prescribed obligations 2. Prescribed circumstances
   
   
Obligation to submit a return under regulation 67B or 67D (real time returns) and 73, 74 and 85 of the PAYE Regulations (annual returns) within the required period. Return is submitted after the due date.

Regulation 45 (Mandatory electronic payment)

Paragraph 2 has now been amended and now reads;

Paragraph (1) applies regardless of whether a payment of tax is due under regulation 67G or 68 of the PAYE Regulations (payment and recovery of tax by employer).

Regulation 56 (Application by the Commissioners for Her Majesty’s Revenue and Customs of sums deducted under section 61 of the Finance Act 2004)

After paragraph 2 the following paragraphs have been inserted;

(2A) For any tax period where as a consequence of paragraph (2) the qualifying sub-contractor pays an amount to the Commissioners for Her Majesty’s Revenue and Customs in respect of any liability referred to in that paragraph that is less than the amount the qualifying sub-contractor would have paid but for that paragraph, paragraph (2B) applies if the qualifying sub-contractor is a Real Time Information employer for the purposes of the PAYE Regulations.

(2B) The qualifying sub-contractor must deliver to the Commissioners for Her Majesty’s Revenue and Customs a return under this paragraph stating the value of the sums deducted from contract payments made to the qualifying sub-contractor under section 61 of the Act (1) in the tax year to date.

(2C) The return required by paragraph (2B) must be delivered within 14 days after the end of the tax period.

(2D) If an employer makes an error in a return under paragraph (2B), the employer must provide the correct information in the first return made under that paragraph after the discovery of the error.

(2E) But if the information given has not been corrected before 20th April following the end of the year in question, the employer must provide the correct information for the year in question in a return under this paragraph.

The wording in paragraph 5 has been amended and now reads as follows;

(5) The Commissioners for Her Majesty’s Revenue and Customs shall not repay any sum deducted under section 61 of the Act to the qualifying sub-contractor unless—

(a) the tax year in which the deduction was made, has ended; and

(b) either—

(i) the qualifying sub-contractor has delivered the return required by regulation 73 of the PAYE Regulations (annual return of relevant payments liable to deduction of tax), or

(ii) the qualifying sub-contractor has delivered to the Commissioners for Her Majesty’s Revenue and Customs each return required under paragraph (2B) for the tax year.”  

After paragraph 7 insert a new paragraph as follows;

(8) A return under this regulation must—

(a) state—

(i) the employer’s HMRC office number,

(ii) the employer’s PAYE reference for the purposes of the PAYE Regulations,

(iii) the employer’s accounts office reference, and

(iv) the tax year to which the return relates, and

(b) be delivered using an approved method of electronic communications unless the qualifying sub-contractor is one to whom regulation 67D of the PAYE Regulations applies, in which case the return must be made in a document or format provided or approved by the Commissioners for Her Majesty’s Revenue and Customs.