Register and maintain subcontractor: turnover test: prospective receipts test
|CISR44600||Action guide contents|
A company or partnership applying for gross payment status is to be regarded as passing the turnover test where it is able to show evidence of
- relevant payments earned on its own account amounting to at least £30,000
- the existence of construction contracts entered into where the aggregate value exceeds £100,000.
This test is specified in SI2005/2045 reg 29(2)(d). It is not open to sole traders.
That a company or partnership is seeking or has secured gross payment status on this basis will generally emerge where
- it, or its representatives, seek guidance about this provision at the time of application
- it comes to light in the course of the Post-Acceptance Check that the turnover figure entered on the application form was calculated on this basis.
In either case you should substantiate the turnover figures by
- looking for evidence of actual turnover of the kind described in CISR44050 (Checking gross turnover figures)
- asking for sight of contracts that established the expectation of future turnover at the date of application.
If you find that in the course of a Post-Acceptance Check the applicant is unable to produce acceptable evidence of prospective turnover satisfying this test you should consider:
- cancelling the applicant’s gross payment status (See CISR43610) for guidance about this
- submitting the case to CIS Advisory Team (See CISR97030) to consider penalty proceedings.