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HMRC internal manual

Construction Industry Scheme Reform Manual

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HM Revenue & Customs
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Appeals against refusal or cancellation of Gross Payment Status - Tax Treatment appeal and the Tribunal Hearing

CISR48000 Information guide contents
   

Having made an appeal to HMRC, the subcontractor may make an appeal to the Tribunal at any time except during the period where they have taken up the offer of an internal review and until the conclusion of that review.

Once the appeal has been logged on CISR, further action needs to be taken in CISR to update the record dependant on the action you are taking with the appeal. To update a Tax Treatment appeal you will need to be in the CISR Tax Treatment Administrator role, and the steps you need to take are shown below.

From the CIS Main Menu

  • 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 the details of any previous appeals and the current ‘open’ appeal will be displayed for you. The ‘appeal papers location’ and Date of Determination fields for the open appeal are currently blank.

  • 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 subcontractor decides to make an appeal to the Tribunal

Where the subcontractor makes an appeal to the Tribunal, you should take the following actions in CISR. In the ‘Appeal Details’ window under the bar entitled ‘Maintain Appeal Details’ from the drop-down menu alongside ‘Appeal Progress’

  • select ‘Listed for Personal Hearing’
  • select the ‘Add notes’ button, and make any notes necessary regarding the appeal now made to the Tribunal of the subcontractor’s Tax Treatment appeal, 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.

This will update the CISR record, but no output will be generated from CISR to the subcontractor.

Important: Shortly before the appeal is heard by the Tribunal the Tribunal caseworker (at their discretion) should request an ‘Information only’ Tax Treatment Qualification Test (TTQT), see CISR43160, this will be particularly important it may now have been some time since the TTQT being appealed against was run. This will inform you whether the subcontractor has been keeping up with their compliance obligations since the date of the automated TTQT, and as to whether the ‘reason to expect’ test (CISR46100) is also passed. This can then be used as further evidence in supporting the Tribunal Caseworker’s opposition to the appeal at the Tribunal Hearing.

The Tribunal caseworker decides that the grounds for the appeal are valid

Before the case goes to a tribunal hearing the tribunal caseworker will carry out a review of the case after calling for the papers from the decision maker, and the review officer (where an internal review was carried out). If the tribunal caseworker decides that the grounds for appeal against the refusal or cancellation of gross payment status are valid, they will send the papers back to the relevant officer(s) and ask the decision maker to inform the appellant (see ARTG8420). The decision maker will then need to take the actions set out in CISR48660 to uphold the subcontractor’s appeal.

The subcontractors appeal is upheld at the Personal Hearing

Following the Tribunal Hearing, if the Tribunal decides to uphold the subcontractor’s appeal you must take the following steps. On the same page, under the bar entitled ‘Maintain Appeal Details’, from the drop-down menu alongside ‘Appeal Progress’

  • select ‘Upheld at Personal Hearing’
  • enter the date of the Personal Hearing in the ‘Date of Determination’ field, doing this does not make an automatic note in the ‘Appeal notes’ window, and you will need to go on to make a manual note of the outcome of the Personal Hearing
  • 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 about the decision by the Tribunal regarding the subcontractor’s appeal. Remember to make a note of who attended the Tribunal Hearing on behalf of the subcontractor as well as the result of the Hearing and also enter your Pay Identity number (PID) as the author of the note, (see CISR48720 for more information regarding the ‘Add Notes’ button)
  • 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.

Final actions where the subcontractor was making an application for gross payment status for the first time, or a request for a change of tax treatment from net to gross

CISR will have kept the subcontractor on net payment status when the appeal was logged, so you will also need to change the tax treatment in CISR using the function ‘Change TT’ (see CISR48710. Forms CIS316 will now be issued to the contractors who have paid the subcontractor to advise that the subcontractor can now be paid gross with immediate effect. CISR will also issue a notification (CIS320) to the subcontractor informing them of the outcome and determine the appeal.

Final actions where the subcontractor held gross payments status and was subject to a scheduled review

CISR will have already maintained (or restored) gross payment status to the subcontractor when the appeal was logged, so no further forms CIS316 will be issued to the contractors who has paid the subcontractor. CISR will issue a notification (CIS320) to the subcontractor informing them of the outcome and determine the appeal.

The subcontractors appeal is rejected at the Personal Hearing

Following the Tribunal Hearing, if the Tribunal decides to reject the subcontractor’s appeal you must take the following steps. On the same page, under the bar entitled ‘Maintain Appeal Details’, from the drop-down menu alongside ‘Appeal Progress’

  • select ‘Rejected at Personal Hearing’
  • enter the date of the Tribunal Hearing in the ‘Date of Determination’ field, doing this does not make an automatic note in the ‘Appeal notes’ window, and you will need to go on to make a manual note of the outcome of the Tribunal Hearing
  • 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 about the decision by the Tribunal regarding the subcontractor’s appeal. Remember to make a note of who attended the Tribunal Hearing on behalf of the subcontractor as well as the result of the Hearing and to enter your Pay Identity number (PID) as the author of the note, (see CISR48720 for more information regarding the ‘Add notes’ button)
  • 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.

Final actions where the subcontractor was making an application for gross payment status for the first time, or a request for a change of tax treatment from net to gross

CISR will have already kept net payment status for the subcontractor when the appeal was logged, so no further forms CIS316 will be issued to the contractors who have paid the subcontractor. CISR will issue a notification (CIS320) to the subcontractor informing them of the outcome and determine the appeal.

Final actions where the subcontractor held gross payments status and was subject to a scheduled review

CISR will have already maintained (or restored) gross payment status to the subcontractor when the appeal was logged. If the appeal is rejected by the Tribunal at any time up to 60 days from the date of the Tax Treatment Qualifying Test (TTQT), then the tax treatment will change to net at the original date specified (day 90 after the date of the TTQT). If however the appeal is rejected by the Tribunal after day 60, then the tax treatment will change to net 30 days after the date the appeal is rejected by the Tribunal, and forms CIS316 will be issued to the contractors that paid the subcontractor advising them to apply net tax treatment at this later date instead.

CISR will also issue a notification (CIS320) to the subcontractor informing them of the outcome and determine the appeal. 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 this time bar has expired.