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HMRC internal manual

Construction Industry Scheme Reform Manual

Register and maintain subcontractor: Tax Treatment Qualification Test (TTQT) - ‘Time to pay’ arrangements

CISR43600 Action guide contents

Self-Assessment liabilities

Where a ‘‘time to pay’’ (TTP) arrangement has been agreed between an individual participant and the Business Payments Support Service (BPSS) or direct with Debt Management & Banking (DMB) regarding a Self-Assessment (SA) liability that is about to become due, if the arrangement has a start date before the due date and is within the ‘‘qualifying period’’ TTQT will not treat the SA debt as becoming due until the end date of the TTP arrangement.

Therefore any liability covered by the arrangement cannot be treated as outstanding or paid late unless it is after the end date for the TTP arrangement. TTQT will therefore only ‘‘Fail’’ such cases where any of the liability covered by the TTP remains outstanding after the ‘‘end date’’ for any TTP arrangement.

If however, the TTP arrangement has a start date which commences after the SA liability has already become due, then TTQT will fail the application provided the due date falls within the ‘qualifying period’, as the liability was not paid by the due date.

Corporation Tax / Employer and Contractor liabilities

For corporation tax liabilities and employer / contractor liabilities whilst the subcontractor may have entered into an agreed TTP arrangement with HMRC before the liabilities become due for payment, TTQT will not be able to identify these cases from COTAX or BROCS / ETMP.

Therefore if a subcontractor says that they entered into a TTP arrangement for either;

  • Corporation tax liabilities shown on COTAX
  • Employer / Contractor liabilities shown on BROCS / ETMP

and the subcontractor kept to the terms of that TTP agreement and you can confirm that was the case, then this aspect of the TTQT will ‘pass’.

Failure to keep to a TTP arrangement

If an agreement to enter into a TTP arrangement is rejected by Debt Management & Banking (DMB) or the subcontractor did not keep to the terms of the TTP, then TTQT will run in the normal manner, and all late payments identified in the qualifying period should be taken into consideration in deciding whether the ‘Compliance Test’ is passed or not.