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HMRC internal manual

Construction Industry Scheme Reform Manual

From
HM Revenue & Customs
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Compliance: Regulation 9(5) directions: co-ordination with Regulation 13(2) determinations

 

CISR83600 Action guide contents
   

Where the contractor does not dispute the obligation to make a deduction and the failure to do so, any representations for a direction under Regulation 9(5) must be considered before a Regulation 13(2) determination is raised. This is because once a Regulation 13(2) determination has been issued it will not be possible to consider a direction under Regulation 9(5) as this is precluded by Regulation 13(3).

Where, however, the contractor disputes the obligation to make a deduction, a Regulation 13(2) determination must be issued, but doing so will rule out any later consideration of a Regulation 9(5) direction.

 

 

 

Example

A contractor may initially contend that no deduction was due because the payment was for an operation outside the scope of the Scheme.

In this case the first step is to determine whether there was a legal duty to apply the Scheme to the payment in question. This may be achieved either by direct agreement between the contractor and HMRC without recourse to issuing a determination under Regulation 13(2), in which case a direction under Regulation 9(5) may then be considered as to whether the failure can be viewed as an ‘error made in good faith’.

If however, it is necessary to issue a determination under Regulation 13(2) to settle the ‘scope’ issue as the matter may go forward either for an internal review, or be heard before the Tribunal, then the fact that a determination under Regulation 13(2) has been made will prevent you from making any later consideration of a Regulation 9(5) direction.