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HMRC internal manual

Construction Industry Scheme Reform Manual

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Register and Maintain Subcontractor: Update Subcontractors details - Cessation of trade of a Subcontractor

CISR41600 Action Guide contents
   

There is no functionality within CIS to enable you to note the cessation of trade of a subcontractor. Any notification of cessation to operate in the Construction Industry will need to be passed to the parent SA/COTAX Processing Office, in order that those records may be noted.

Where the individual or partner subcontractor held gross payment status at the date of cessation,  PT Operations, NIC&E0 should change the tax treatment to ‘Net’ with 90 days’ notice using the instructions at CISR43610 to do so.

Where a company subcontractor held gross payment status at the date of cessation, the CT CIS Centre at Hull should change the tax treatment to ‘Net’ with 90 days’ notice using the instructions at CISR43610 to do so. Note however, that where the company has already been ‘struck off’ then the CIS system will not allow you to make this change.

These actions will avoid the Tax Treatment Qualification Test (TTQT) from running in the future and any resultant output from being issued to the customer.

Ceased individual or partner subcontractors cases may also come to your attention when working Self-Assessment worklist W051 (see SAM125011).

Where you identify that there is a ceased source within the construction industry from this worklist you should make a note of the case on to a spreadsheet and periodically send the spreadsheet across to PT Operations, NIC&EO to review.

PT Operations NIC&EO will then

  • check to see whether the subcontractor holds gross payment status and, if they do, take action to change the tax treatment to net with 90 days’ notice
  • check to see whether the subcontractor also acts as a contractor and, if they do, whether EBS has yet been noted of the cessation of trade
  • note EBS of the date of cessation
  • set Return Exemptions and Penalty Inhibitions (as appropriate) on the CIS record for the contractor to avoid unnecessary penalties from being issued.