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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: appeals against refusal or cancellation of gross payment status: turnover test refusals

CISR48000 Information contents
   

This action guide outlines the steps you should take in dealing with appeals against refusals to grant gross payment status based on failure of the turnover test.

For appeals against refusals based on the business or the compliance test see the separate action guide at CISR48610. It is important to ensure that all the reasons for failure are taken into account when considering any appeal.

  1. When you receive an appeal, check that the appeal states the grounds for the appeal. If it does not, write to the subcontractor asking them to supply the grounds for the appeal.
  2. Run an ‘Information only’ TTQT (see CISR43180). This is because, at this stage, the applicant would not have gone through the compliance test. This will then inform you whether the compliance test also passes or fails.

Once you have an appeal complete with stated grounds, or it becomes clear that the applicant does not intend to supply grounds, the decision maker will examine the applicant’s papers and the appeal and proceed as below. Where no grounds are offered, or it is still not possible to resolve the disagreement, proceed as below.

Where the applicant says the calculation is incorrect, you should ask them for their version of the calculation. If the applicant’s calculation is incorrect;

* Use the refusal notice to illustrate your explanations of how it is incorrect or make a printout from the 'Registration for Gross' application using cut and paste to illustrate your point, or transcribe the details from the window to the letter.
  1. The Decision Maker should send an explanation to the applicant and offer a review of the matter (see CISR48690 and ARTG4000). At the same time you should identify for the applicant any compliance failures shown by the ‘Information only’ TTQT that was run.
  2. If you establish that the figures provided for the turnover test were incorrect and that the applicant’s figures should have resulted in a pass, the applicant should be invited to request a change of Tax Treatment by completing a further application form using the correct figure of turnover. Then, you should take the following action;

Re-enter the correct figures using the function ‘Request New TT’ (See CISR43600) and CISR will then run TTQT and will now test the subcontractor’s compliance history. If TTQT comes up with a pass result, then gross payment status will be allocated to the subcontractor and you should proceed as described in CISR48660.

* If TTQT finds that the application now fails on compliance grounds then form CIS308 will be issued to the subcontractor (see [CISR43170](https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr43170)) identifying the areas of failure and you should proceed as in [CISR48680](https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr48680).

Where you decide to accept the appeal then you should proceed as in CISR48660.