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HMRC internal manual

Construction Industry Scheme Reform Manual

Appeals against refusal or cancellation of Gross Payment Status - Logging a Tax Treatment Appeal

CISR48000 Information guide contents

All appeals against Tax Treatment must be made by the subcontractor or their authorised agent in writing, within 30 days of the notice to change the tax treatment status of the subcontractor (CIS308). There is also a provision to allow for a late appeal to be accepted either by HMRC (see ARTG2240), or by the Tribunal (see ARTG8200).

It is important that all appeals received are logged on CISR on the day they are received by HMRC. The reason for this is that where gross tax treatment is withdrawn from the subcontractor; the priority logging of the appeal could prevent contractor letters (CIS316) advising of the subcontractor’s change of Tax Treatment to net payment status being issued. These letters are normally issued at day 55 after the Tax Treatment Qualification Test (TTQT) was finalised.

However, where you receive an appeal against refusal to grant or withdrawal of gross tax treatment, but the appellant has not stated any grounds for their appeal, then the appeal should not be logged on to CIS. Instead, you should write to the customer to ask them to tell us on what grounds they are making their appeal.

To log a ‘Tax Treatment Appeal’ you will need to use the role within CISR called CISR Tax Treatment Administrator. It should be noted that where the subcontractor already has an open Tax Treatment appeal, it will not be possible for you to log another Tax Treatment appeal on CISR against the same registration for the subcontractor (example: ‘as sole trader’). Instead you will need to continue working the previous Tax Treatment appeal.

CISR will automatically issue an acknowledgement of the appeal (CIS320) to both the subcontractor and the Customer Level Agent where the Customer Level Agent made the appeal (see CISR19020 for further information regarding Customer Level Agents), or to the subcontractor only where the subcontractor made the appeal.

Where the appeal is made by a third party (for example, the subcontractor’s spouse) the appeal acknowledgement will still go to the subcontractor, except where the spouse has been set up as a Customer Level Agent following the submission of an authority (form 64-8 or FBI 2) from the subcontractor.

CISR will also create a work item on the PEGA system for every appeal logged, and you will need to take action regarding this work item depending on how the subcontractor’s appeal is to be treated. See CISR48600 onwards for the various actions possible, and see also CISR95640 regarding the action to take on the work item. See also CISR48630 for the action guide which tells you how to log a Tax Treatment appeal.

Where the appeal is being logged at the CT CIS Centre Hull, after logging the appeal you should carry out an initial check on CISR to see if there is an Employer Compliance Review (ECR) open (this is visible in ‘View Customer’ under the Contractor Scheme). Where there is an ECR open, you should liase with the Employer Compliance Officer (ECO) carrying out the ECR to inform them that you have a Tax Treatment appeal for the company, and see whether;

  • the ECO wishes to work the Tax Treatment appeal as part of their ECR
  • if not, have they identified any Compliance failures which can be taken into account when working the Tax Treatment appeal

Where you wish to re-open a Tax Treatment appeal because the subcontractor has now reneged from an earlier agreement, please follow the information panel at CISR48060, and the action guide at CISR48640. In the event that a second Tax Treatment appeal is received where one is already ‘open’, you will not be able to log this on to the system, instead you should make a note of its receipt against the original Tax Treatment appeal using the [Add notes] button (See Step 6 of CISR48630).