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HMRC internal manual

Construction Industry Scheme Reform Manual

Register and maintain subcontractor: compliance test: misuse of documents/registration status

CISR46600 Action guide contents

You should refuse gross payment status to anyone who has done any of the following during the 12 months up to the date of application

  • misused an old-style certificate or vouchers
  • made use of a certificate or voucher issued to another person in order to obtain payment without deduction or to reduce their own tax liability
  • made use of any false certificates or vouchers
  • falsely represented themselves as registered for gross payment to a contractor
  • misused gross payment status for a fraudulent purpose.

The reason for refusal in these cases are that the subcontractor has not fulfilled their obligations under ICTA88 and TMA70, or given HMRC reason to expect that they will do so in future.

If the failure took place more than 12 months before the date of application you should still consider whether the application should be refused. Your reason for refusal would then have to be that there is no reason to expect that the subcontractor will use gross payment status correctly in the future. For more detail on ‘reason to expect’ failures see (CISR46100) under the information menu.

Use of expired old-style certificates

This guidance applies only to applicants for gross payment status who used old-style CIS vouchers in the qualifying period but after the corresponding certificate had expired.

Strictly, the completion of CIS vouchers in connection with an old-style certificate that has passed its expiry date is a misuse. However, you need to distinguish between cases of oversight and cases of intentional misuse or recklessness.

You should not refuse gross payment status in cases of innocent oversight. However, you should consider refusal in more serious cases, such as the following

  • vouchers were completed for many payments after the expiry of the certificate
  • vouchers were completed for contractors not known to have made payments while the certificate was valid
  • vouchers were pre-dated to a date before the expiry of the certificate
  • there was evidence that the expiry date of the certificate had been altered.