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HMRC internal manual

Construction Industry Scheme Reform Manual

HM Revenue & Customs
, see all updates

Compliance: Regulation 9(5) directions: Developments after refusals

CISR83600 Action guide contents

If, having refused a request for a direction under regulation 9(5) ‘Condition B’, the contractor immediately supplies you with evidence suggesting that the refusal is not soundly based; you should ask the subcontractor’s Processing Office whether the position has changed. However, you cannot keep re-visiting the claim to see whether the subcontractor(s) involved have now satisfied regulation 9(5) ‘Condition B’, and you should look to making a regulation 13(2) determination to collect the deduction due that the contractor should have made , or including the amount in a Class 6 settlement.

Later requests

If a regulation 9(5) ‘Condition B’ direction is refused the contractor has to pay the amount that should have been deducted either by way of a regulation 13(2) Determination or a Class 6 settlement. Once a regulation 13(2) determination has been raised you are precluded from considering a regulation 9(5) direction by regulation 13(3) see CISR83040.

Similarly, if a Class 6 settlement has been negotiated and agreed, the Class 6 settlement cannot be re-opened at some later date, if by that date the subcontractors have now paid their tax and Class 4 NIC, or corporation tax, and the requirements of Regulation 9(5) ‘Condition B’ are now met. By agreeing to the Class 6 Settlement the contractor has entered into a legally binding contract, part of (or the whole of) which can only be set aside in the limited circumstances set out in the guidance at EM6413.