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HMRC internal manual

Construction Industry Scheme Reform Manual

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Appeals against refusal or cancellation of Gross Payment Status - Decision Maker decides that the withdrawal of gross tax treatment was correct

CISR48000 Information guide contents
   

Once the appeal has been logged, further action needs to be taken in CISR to update the record dependent on the action you are taking with the appeal. This action guide describes the actions necessary where the decision maker confirms the decision to withdraw gross tax treatment from the subcontractor.

The decision maker will write to the appellant stating the reasons why you consider that their appeal cannot be sustained and offer to the appellant an internal review of the matter (see ARTG4000). Where the appeal is against the failure of the business test also point out if the applicant also fails the turnover test, and identify any failures found under the compliance test.

The decision maker will make the offer to the subcontractor of an internal review of the matter (see CISR48050 and ARTG2190), and will wait for 30 days (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to hear from the(This content has been withheld because of exemptions in the Freedom of Information Act 2000) appellant. In the meantime, the following actions in CISR should be taken.

  • Select the registration against which the Tax Treatment appeal has been made
  • Select [Maintain TT Appeal] from the menu options supplied at the bottom of the page.

This will take you to the ‘Maintain Appeal’ window, and details of any previous appeals and the current ‘open’ appeal will be displayed for you. The ‘appeal papers location’ may be completed showing the current location of the appeal papers, and the Date of Determination field for the ‘open’ appeal will currently not be completed.

CISR will automatically recognise where a Tax Treatment Appeal has already been logged and is still ‘open’ and so will display the ‘Update Appeal’ button automatically once ‘Maintain TT Appeal’ has been selected. In the CISR Tax Treatment Administrator role, from the CIS Main Menu;

  • Select the ‘Update appeal’ button.

This will take you to the ‘Appeal Details’ window. The following headings describe the action you need to take in CISR in each of the following cases.

The decision maker decides that the withdrawal of gross tax treatment was correct

If you decide that the subcontractor does not have grounds for appeal, or that the ‘reasonable excuse’ (See CISR81020) that they have stated is not valid. You should write to the subcontractor setting out the reasons for your decision (this is known as the decision letter). You should take the following actions in CISR.

  • On the same page under the bar entitled ‘Maintain Appeal Details’ from the drop-down menu alongside ‘Grounds for Appeal’ make the selection that most closely matches the appeal you have received.
  • Select the failures disputed (if not already done).
  • From the drop-down menu by ‘Appeal progress’, select ‘Withdrawal invited’.
  • Select the ‘Add notes’ button and make a note of the actions you have taken, remembering to enter your Pay Identity number (PID) as the author of the note, (see CISR48720 for more information regarding this).
  • Select [Back] on the ‘Appeal notes’ window
  • Select [OK] on the ‘Appeal Details’ window.

BF the case for 45 days to await the subcontractor’s decision on how they wish to progress their appeal, and whether they take up the offer of an internal review, or make an appeal direct to the Tribunal. If no response to the decision letter is made by the appellant within that time, then proceed as in the next sub-heading below.

The subcontractor does not respond to the decision letter

If the subcontractor does not respond to the decision letter and, at the same time, does not make an appeal direct to the Tribunal within 30 days, you must take the following steps in CISR. In the ‘Appeal Details’ window under the bar entitled ‘Maintain Appeal Details’ from the drop-down menu alongside ‘Appeal Progress’

  • select ‘Withdrawn’
  • enter today’s date in the ‘Date of Determination’ field
  • make an entry of the District Record (DR) reference of where the appeal papers are to be filed
  • select the ‘Add notes’ button, and make any notes necessary regarding the fact that the subcontractor has either accepted the decision maker’s view of the matter or has not replied to the decision letter, remembering to enter your Pay Identity number (PID) as the author of the note, (see CISR48720 for more information regarding this).
  • take a screen print of the notes page relating to the appeal after you have made your note, and file this screen print with the appeal papers, see the guidance at CISR48720 on how to do this
  • select [Back] on the ‘Appeal notes’ window
  • select the [Appellant Details] button on the ‘Appeal Details’ window
  • select [OK] on the ‘Appellant Details’ window.

CISR will have already maintained (or restored) gross payment status to the subcontractor when the appeal was logged. If the appeal is withdrawn at any time from the date of the Tax Treatment Qualifying Test (TTQT) and up to day 60 after that date, then the tax treatment will change to net at the original date specified (day 90 after the date of the TTQT). If the appeal however is withdrawn after day 60, then the tax treatment will change to net 30 days after the date the appeal is withdrawn.

CISR will issue a notification (CIS320) to the subcontractor informing them of the outcome and determine the appeal under TMA70/S54. The subcontractor will not be able to hold gross payment status for 12 months from the date of change to net tax treatment. This does not prevent the subcontractor from making an application for gross tax treatment during this period, but any such application made will not be successful until the time bar has expired.