beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Construction Industry Scheme Reform Manual

Register and maintain subcontractor: compliance test: voluntary arrangement cases

CISR46600 Action guide contents

Gross payment applications from participants in voluntary arrangements present special problems because of the likely compliance failures. However, when processing these applications the Tax Treatment Qualification Test (TTQT) will identify for you all of the failures found within the qualifying period and so any TTQT failure in these cases can de dealt with along normal lines whilst, in addition, following the guidance set out below.

Before finalising a TTQT including a voluntary arrangement you should obtain details of;

  • when the voluntary arrangement commenced
  • when the voluntary arrangement is due to come to an end
  • whether the applicant has kept to the terms of the voluntary arrangement.

This information can be obtained either by obtaining a copy of the relevant pages of the voluntary arrangement showing this information from the HMRC Voluntary Arrangement Service, Worthing, or by telephoning that department and asking for the above information.

Cancellation of gross payment status under FA04/s66 in conjunction with FA04/Sch 11(4), (8) and (12) requires that any failure must have occurred during the ‘qualifying period’, (this is the 12 month period leading up to the date of the TTQT). Therefore, you no longer need to establish what the expected dividend will be from the voluntary arrangement, nor the amount of the HMRC debt included within the voluntary arrangement.

So where an applicant who has entered into a voluntary arrangement, has kept to the terms of the voluntary arrangement and has complied with all of their obligations under the Taxes Acts falling due within the ‘qualifying period’, then they will be able to retain (or apply) for gross payment status successfully, provided that they also pass the business and turnover tests.

The Action guide at CISR43710 sets out how you should work applications for gross payment status in voluntary arrangement cases.