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HMRC internal manual

Construction Industry Scheme Reform Manual

Deductions: credit and repayment: gross payment status withdrawn - successful appeal

CISR72600 Action guide contents

Where a subcontractor has their gross payment status withdrawn by HMRC following the application of the ongoing TTQT, they will receive 90 days’ notice before the withdrawal takes effect. If the withdrawal of gross payment status occurs because of serious compliance failures, then the withdrawal is made with immediate effect.

If a later appeal is made against the withdrawal of gross payment status after CIS deductions have commenced, the subcontractor’s payment status will once again revert to gross payment status following the logging of that appeal, and a change of tax treatment notification on form CIS316(B) will be issued to the contractor(s) associated with the subcontractor.

There will therefore be an intervening period when the subcontractor had CIS deductions made before the appeal was logged. Where this happens, the subcontractor has no right of early repayment of any CIS deductions made in these circumstances. This is because, until such time as the Tribunal or the courts decide otherwise, there is no legal entitlement for the subcontractor to be paid gross in the intervening period.