CISR83010 - Compliance: Regulation 9(5) directions: Introduction

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This paragraph serves as an introductory overview of the section on Regulation 9(5) directions. For more detailed coverage use the above links to the information menu or action guide menu.

The section covers the processes involved in dealing with requests by contractors to be relieved of liability where they have failed to make deductions properly due from payments to subcontractors.

These requests are provided for under SI2005/2045 reg 9. Under Regulation 9(5) HMRC can direct that the contractor is relieved of the liability for the failure to make a deduction under FA04/S61. This can be allowed on either of two grounds.

  1. Under Regulation 9(3) - ‘Condition A’. Where the failure to make a deduction arose from an ‘error made in good faith’ or a ‘genuine belief’ that the payment was not within the scope of the Scheme (see CISR83020).
  2. Under Regulation 9(4) - ‘Condition B’. Where the subcontractor was not liable to tax on the payment, or has made a return of their income and profits in which the payment(s) made by the contractor were taken into account and where the subcontractor has paid the income tax and Class 4 NIC, or corporation tax due in respect of such income or profits (see CISR83050).

Specific subjects covered by the section include

  • dealing with requests for Regulation 9(5) directions
  • dealing with appeals where requests are refused
  • guidance about the effect of such requests on related Regulation 13(2) determination proceedings.

Note that this section fully covers the action you should take if you receive a request for a Regulation 9(5) direction but are not authorised to act as a ‘Collector’ (see CISR83030).

The detailed procedures for the handling of Regulation 9(5) directions and associated appeals are at

  • CISR83020 - Regulation 9(5) directions -‘Condition A’
  • CISR83030 - Regulation 9(5) directions -‘Condition B’
  • CISR83020 - Appeals under Regulation 9(7)