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HMRC internal manual

Construction Industry Scheme Reform Manual

HM Revenue & Customs
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The Scheme: miscellaneous: company receiverships

CISR18600 Action guide contents

A receivership is where an insolvency practitioner is appointed to control the whole, or major part, of a company’s assets and property, for the benefit of a secured creditor. The practitioner is known as the administrative receiver and may be appointed by one or more debenture holders. In this context, the administrative receiver may also call themselves the ‘receiver’ or ‘manager appointed’.

Administrative receivership can result in any of the following

  • the control of the business being returned to its directors
  • the appointment of a liquidator
  • the sale of the business and its assets as a going concern


When you become aware that a company has gone into receivership the important factors for CIS are

  • whether trade has ceased
  • if trading has not ceased, whether the day-to-day management of the company remains in the hands of the directors
  • if trading has not ceased and the day-to-day management of the company is in the hands of the receiver, whether they expect to enter into new contracts for construction work on behalf of the company

You should write to the receiver as described in the action guide at CISR18630 to establish these points. The action guide explains what to do in the various situations on receipt of the information.

Sale of the business

If a company in receivership is sold together with its assets, this normally involves the transfer of its shares to another person who has not previously been a shareholder in the company. In these circumstances the company is obliged to notify you of the name and address of the person to whom the shares were transferred or issued where the following apply

  • the company has been allowed to retain gross payment status on the basis outlined above, or has made an application for such status


  • the company is a ‘close’ company


  • the transfer of shares arising from the sale amounts to a change in the control of the company within the meaning of ICTA88\S840.

You would then need to investigate whether the person or persons who have acquired control of the company have satisfactory tax records.

Continued trading - contractor schemes

Where a company in receivership continues to operate as a going concern, it may engage subcontractors. If it does, the Centralised Employers Team, NICEO for the company in receivership will open a new P/SC or XP scheme in the name of the receiver (See the Insolvency Manual at INS2205). For the purposes of CIS you should treat this as an additional scheme associated with the contractor company. The Centralised Employers Team will need to link the contractor’s CIS taxpayer record with the new EBS record as a second scheme.