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HMRC internal manual

Construction Industry Scheme Reform Manual

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HM Revenue & Customs
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Register and maintain subcontractor: compliance test: twelve month qualifying period

CISR46600 Action guide contents
   

The compliance test requires that the subcontractor must have complied with all taxobligations under FA04, ICTA88 and TMA70 on time in the 12 months up to the date ofapplication for gross payment status.

You need to be sure that you know what the applicant has been doing in the last 12 months.It is not enough that there are no records for that person in that period and thereforethat there have been no recorded failures to comply. If the applicant claims that theyhave been unemployed or living abroad and so has had no tax obligations in the UK, youshould follow these claims up.

Absence abroad

Where the applicant claims to have been abroad for any part of the 12 months up to thedate of application, you should ask for documentary evidence in support of the claim(SI2005/2045 reg 33).

Where the applicant has been working abroad, the evidence should come from the revenueauthority of that country, stating that the tax obligations of that country have been metby the applicant.

Where the applicant was not working in that country, the evidence should come from therelevant immigration authorities or any other government department of that country andshould confirm their presence there throughout the stated period.

Periods of unemployment

Where the applicant claims to have been unemployed for any part of the 12 month period,you should ask for documentary evidence of this from a benefits officer (SI2005/2045 reg35). Where the applicant was not registered unemployed, you should ask for any otherevidence they can supply to support their case.

You may be able to confirm an applicant’s unemployed status by looking at their NationalInsurance contributions record. You will find more information on how to do this under theinformation menu.

Periods of full time education

Where the applicant claims to have been in full time education for any part of the 12month period, you should ask for documentary evidence of this (SI2005/2045 reg 36).

Any period of full-time education or full-time training should be verified as follows

Establish the applicant’s date of birth. If the period claimed is before their eighteenthbirthday, then you can accept the claim.

If the period claimed is after their eighteenth birthday and they can supply supportingevidence that they were in full time education or training in the UK, then you can acceptthe claim.

In any other case, you should tell the applicant that the most recent period of full-timeeducation and any periods of full-time training falling within the qualifying period willhave to be verified. You should ask for

  • the full name and address of the last school they attended after the age of 16 and of any training establishment;
  • details of the course, that is, starting date, finishing date, course number or other identifying title, the nature of the studies or training and confirmation that the course was full-time;
  • authority for HMRC to approach the school, or training establishment, to obtain verification of the period of full-time education or training; and
  • authority for the school, or training establishment, to disclose the information to HMRC.

Once you have received this information you should write to the establishment concernedseeking confirmation.

Any case involving education or training after age 18 outside the UK should be submittedwith the file to the CIS Advisory Team for advice (see CISR97030).In other cases, if the reply confirms the applicant’s statements you can accept the claim.You can ignore minor discrepancies.