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HMRC internal manual

Construction Industry Scheme Reform Manual

HM Revenue & Customs
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Deductions: SA subcontractors: refusal of all or part of claim to credit or repayment

CISR75600 Action guide contents

An officer may allow less credit or repayment than is claimed in an SA return, for instance, because

  • the deduction shown cannot be confirmed
  • an in-year repayment has already been made in respect of the transaction included in the return

The only route however for allowing a deduction that is less than that claimed on the SA Return is by opening a Section 9A Enquiry

Credit for deduction in SA return - Section 9A enquiry

TMA70/s31 refers to cases where the Compliance officer amends the self-assessment during or following a Section 9A enquiry. A refusal of a claim for a deduction in an SA return can only be made following the opening of a Section 9A enquiry. The Compliance officer will give effect to the refusal by amending the taxpayers return under TMA70/s28A. The taxpayer then has the right of appeal under TMA70/s31. The appeal is against the Compliance officer’s amendment to the self-assessment, which withdraws the credit for deduction.

If agreement cannot be reached between the appellant and the Compliance officer, the appellant has the right to ask for an Internal Review (see ARTG4000) and/or appeal to the Tribunal (see ARTG8000).

In-year repayments for SA subcontractors

CISR75030 explains the circumstances where in-year repayments may be made to subcontractors under SA. An officer may refuse a formal in-year repayment in any of the following situations

  • a deduction cannot be confirmed
  • the taxpayer’s affairs are not up to date
  • the subcontractor’s accounting period ending in the tax year for which the claim is made has not yet ended
  • a partner has not obtained the written agreement of the other partners to their making an in-year claim
  • the claim is made after the end of the tax year to which the deductions relate.

Any refusal should be made in writing. There is no right of appeal against a refusal.