Made | 25th July 2005 | ||
Laid before the House of Commons | 25th July 2005 | ||
Coming into force in accordance with regulation 1 |
1. | Citation and commencement |
2. | Interpretation |
3. | Multiple contractors |
4. | Monthly return |
5. | Scheme representative |
6. | Verification etc of registration status of sub-contractor and nominee |
7. | Payment, due date for payment of amounts deducted and receipts |
8. | Quarterly tax periods |
9. | Recovery from sub-contractor of amount not deducted by contractor |
10. | Return and certificate if amount may be unpaid |
11. | Notice and certificate if amount may be unpaid |
12. | Certificate after inspection of records of contractors and sub-contractors |
13. | Determination of amounts payable by contractor and appeal against determination |
14. | Interest on amounts overdue |
15. | Interest on amount overpaid |
16. | Recovery of amount unpaid and interest |
17. | In-year repayments of provisional excess credit |
18. | Small payments |
19. | Work carried out on land owned by person to whom payment is made |
20. | Reverse premiums |
21. | Payments as agent of a local education authority |
22. | Payments in respect of property used for business |
23. | Arrangements involving public bodies |
24. | Charities |
25. | Registration for gross payment or for payment under deduction and cancellation of registration for payment under deduction |
26. | Cancellation of registration for gross payment |
27. | Evidence prescribed to satisfy the business test |
28. | Minimum turnover |
29. | Evidence prescribed to satisfy the turnover test |
30. | Number of partners or relevant persons |
31. | Turnover test treated as satisfied in prescribed circumstances |
32. | Exceptions from compliance obligations |
33. | Absence abroad – evidence of living outside the United Kingdom |
34. | Absence abroad – evidence of compliance with tax obligations |
35. | Evidence of unemployment |
36. | Evidence of full-time education |
37. | Interpretation |
38. | Interpretation |
39. | Whether information has been delivered electronically |
40. | Proof of content of electronic delivery |
41. | Proof of identity of person sending or receiving electronic delivery |
42. | Information sent electronically on behalf of a person |
43. | Proof of delivery of information sent electronically |
44. | Proof of payment sent electronically |
45. | Mandatory electronic payment |
46. | Contractor in default if specified payment not received by applicable due date |
47. | Default notice and appeal |
48. | Default surcharge |
49. | Surcharge notice and appeal |
50. | Delegation of Commissioners for Her Majesty's Revenue and Customs' functions |
51. | Inspection of records of contractors and sub-contractors |
52. | Inspection of records of sub-contractors – additional provisions |
53. | Information as to change of control of close company |
54. | Death of contractor |
55. | Service by post |
56. | Application by the Commissioners for Her Majesty's Revenue and Customs of sums deducted under section 61 |
57. | Certificate that sum due |
58. | Payment by cheque |
59. | Appeals: supplementary provisions |
60. | Transitional provisions, savings and revocation |
SCHEDULE 1 | TRANSITIONAL PROVISIONS AND SAVINGS |
PART 1 | GENERAL PROVISIONS |
PART 2 | SPECIFIC PROVISIONS |
SCHEDULE 2 | REVOCATIONS |
(3) While an election is in force, a contractor must allocate any new sub-contractors to one of the groups.
(4) An election must be made by notice to an officer of Revenue and Customs containing—
(5) A contractor must, subject to paragraph (6), make an election before the beginning of the tax year for which it is to have effect.
(6) A contractor who acquires the whole or part of any business of another contractor may, within 90 days of the acquisition, elect—
and such election has effect for the tax year in which the acquisition takes place.
(7) In paragraph (6)—
(8) An election continues in effect until revoked by notice given to an officer of Revenue and Customs.
(9) A notice of revocation must be given before the beginning of the tax year for which the election is to be revoked, but the revocation of an election does not prevent the making of a new election for that or a later tax year.
(10) An election which has not yet come into effect may be revoked at any time before the beginning of the tax year for which it is to have effect.
Monthly return
4.
—(1) A return must be made to the Commissioners for Her Majesty's Revenue and Customs in a document or format provided or approved by the Commissioners—
(2) The return under paragraph (1) must contain the following information—
(3) The information specified is—
(b) if the sub-contractor is registered for payment under deduction—
(c) if the sub-contractor is not registered for gross payment or payment under deduction—
(4) The return may be transmitted electronically to the Commissioners for Her Majesty's Revenue and Customs.
(5) The return must include a declaration by the person making the return—
(6) If the return is not transmitted electronically, it must be signed by the contractor or a person duly authorised by the contractor to make the return.
(7) The contractor must make and keep such records as will enable him to comply with this regulation.
(8) The contractor must give the following information in writing to the sub-contractor to whom it relates not later than 14 days after the end of the tax month either in respect of the total payments made in that month or in respect of each payment made in that month—
and
(b) if the sub-contractor is not registered under Chapter 3 of the Act, the verification reference.
(9) The information required under paragraph (8) may be given by means of electronic communications if—
(10) If a contractor who has made a return, or should have made a return, under this regulation makes no payments under construction contracts in the tax month following that return, the contractor must make a nil return not later than 14 days after the end of that tax month.This is subject to paragraph (11).
(11) Paragraph (10) does not apply if the contractor has notified the Commissioners for Her Majesty's Revenue and Customs that the contractor will make no further payments under construction contracts within the following six months.
(12) Subject to paragraph (13), section 98A of TMA[9] (special penalties in the case of certain returns) applies to the requirements in—
(13) A penalty under section 98A of TMA in relation to a failure to make a return in accordance with paragraphs (1) or (10) arises for each month (or part of a month) during which the failure continues after the 19th day of the sixth month following the appointed day.
Scheme representative
5.
—(1) A company ("the appointing company") which makes payments under construction contracts may appoint another company in the same group ("a scheme representative") to act on its behalf in connection with any such requirements imposed on the company by these Regulations as the appointment specifies.
(2) An appointment under paragraph (1) shall not have effect until the appointing company has notified the Commissioners for Her Majesty's Revenue and Customs .
(3) A scheme representative must make returns and payments under these Regulations in the name of the appointing company.
(4) The appointing company remains liable in relation to all the requirements imposed on it by these Regulations notwithstanding any appointment under paragraph (1).
(5) For the purposes of paragraph (1) section 413(3)(a) of ICTA applies to determine whether two companies are in the same group.
Verification etc of registration status of sub-contractor and nominee
6.
—(1) A contractor must verify with the Commissioners for Her Majesty's Revenue and Customs whether a person to whom he is proposing to make—
and, where that person has appointed a nominee, his nominee, are registered for gross payment, for payment under deduction or is not registered under Chapter 3 of the Act.This is subject to paragraph (3).
(2) For the purpose of verification the contractor must provide—
(3) A contractor may not verify under paragraph (1) unless the contractor has a contract with the sub-contractor or has formally accepted a tender for work under a contract.
(4) A contractor need not verify if—
(5) For the purposes of paragraph (4)(c) section 413(3)(a) of ICTA applies to determine whether two companies are in the same group.
(6) The Commissioners for Her Majesty's Revenue and Customs must notify a contractor that—
if a payment to that person has been included in the contractor's return under regulation 4, or a return under regulation 40A of the Income Tax (Sub-contractors in the Construction Industry) Regulations 1993, in the current or previous two tax years or that person has been verified under paragraph (1) by the contractor in that period.
(7) A contractor is entitled to assume that—
has not subsequently ceased to be so registered.
(2) The Commissioners for Her Majesty's Revenue and Customs must give a receipt to the contractor for the total amount paid under paragraph (1) if asked.
(3) But no separate receipt for the total amount paid under paragraph (1) need be given if a receipt is given for the total of—
paid at the same time.
Quarterly tax periods
8.
—(1) This regulation applies so that the tax period is a tax quarter if a contractor—
(2) "The average monthly amount" is the average, for tax months falling within the current tax year, of the amounts found by the formula—
(P + N + L +S) – (SP + CD). |
(4) In this regulation—
Recovery from sub-contractor of amount not deducted by contractor
9.
—(1) This regulation applies if—
(2) In this regulation—
(3) Condition A is that the contractor satisfies an officer of Revenue and Customs—
(4) Condition B is that—
and
(b) the contractor requests that the Commissioners for Her Majesty's Revenue and Customs make a direction under paragraph (5).
(5) An officer of Revenue and Customs may direct that the contractor is not liable to pay the excess to the Commissioners for Her Majesty's Revenue and Customs.
(6) If condition A is not met an officer of Revenue and Customs may refuse to make a direction under paragraph (5) by giving notice to the contractor ("the refusal notice") stating—
(7) A contractor may appeal against the refusal notice—
(8) For the purpose of paragraph (7) the grounds of appeal are that—
(9) If on an appeal under paragraph (7) it appears to the tax appeal Commissioners that the refusal notice should not have been issued they may direct that an officer of Revenue and Customs make a direction under paragraph (5) in an amount the tax appeal Commissioners determine is the excess for one or more tax periods falling within the relevant year.
(10) If a contractor has deducted an amount under section 61 of the Act, but has not paid it to the Commissioners for Her Majesty's Revenue and Customs as required by regulation 7 (payment, due date etc. and receipts), that amount is treated, for the purposes of determining the liability of any sub-contractor in respect of whose liability the sum was deducted, as having been paid to the Commissioners for Her Majesty's Revenue and Customs at the time required by regulation 8 (quarterly tax periods).
Return and certificate if amount may be unpaid
10.
—(1) This regulation applies if, 17 days or more after the end of a tax period, condition A or B is met.
(2) Condition A is that—
(3) Condition B is that—
(4) An officer of Revenue and Customs may give notice to the contractor requiring the contractor within 14 days of the issue of the notice to deliver a return showing the amount which the contractor is liable to pay under regulation 7 in respect of the tax period.
(5) If the notice extends to two or more consecutive tax periods in a tax year, this regulation has effect as if they were one tax period.
(6) On receiving a return made by the contractor under paragraph (4), an officer of Revenue and Customs may prepare a certificate showing the amount which the contractor is liable to pay for the tax period and how much (if any) of that amount remains unpaid.
(7) Regulation 57 (certificate that sum due) deals with the use of certificates as evidence that sums are due and unpaid.
Notice and certificate if amount may be unpaid
11.
—(1) This regulation applies if, 17 days or more after the end of a tax period, condition A or B is met.
(2) Condition A is that—
(3) Condition B is that—
(4) An officer of Revenue and Customs, on consideration of the contractor's record of past payments, may—
(5) If condition A is met an officer of Revenue and Customs may give notice under paragraph (4) which extends to two or more consecutive tax periods in a tax year and these Regulations have effect as if they were the latest tax period specified in the notice.
(6) If, during the notice period, the contractor—
the contractor may require an officer of Revenue and Customs to inspect the contractor's documents and records as if the contractor had been required to produce those documents in accordance with regulation 51 (inspection of records of contractors and sub-contractors).
(7) If there is an inspection by virtue of paragraph (6), regulation 51 applies to that inspection and the notice given by an officer of Revenue and Customs under paragraph (4) must be disregarded.
(8) If the amount specified in the notice, or any part of it, is not paid during the notice period—
(9) But paragraph (8) does not apply if during the notice period—
(10) Paragraph (11) applies if the contractor pays an amount certified under this regulation which exceeds the amount the contractor would have been liable to pay in respect of that tax period apart from this regulation.
(11) The contractor is entitled to set off the excess against any amount which the contractor is liable to pay under regulation 7 for any subsequent tax periods in the tax year.
(12) Regulation 57 deals with the use of certificates as evidence that sums are due and unpaid.
Certificate after inspection of records of contractors and sub-contractors
12.
—(1) This regulation applies if there is an inspection of a contractor's documents and records under regulation 51.
(2) An officer of Revenue and Customs may, by reference to the information obtained from the inspection, prepare a certificate showing—
(3) Regulation 57 deals with the use of certificates as evidence that sums are due and unpaid.
Determination of amounts payable by contractor and appeal against determination
13.
—(1) This regulation applies if—
(b) an officer of Revenue and Customs has reason to believe, as a result of an inspection under regulation 51 or otherwise, that there may be an amount payable for a tax year under these Regulations by a contractor that has not been paid to them, or
(c) an officer of Revenue and Customs considers it necessary in the circumstances.
(2) An officer of Revenue and Customs may determine the amount which to the best of his judgment a contractor is liable to pay under these Regulations, and serve notice of his determination on the contractor.
(3) A determination under this regulation must not include amounts in respect of which a direction under regulation 9(5) has been made and directions under that regulation do not apply to amounts determined under this regulation.
(4) A determination under this regulation may—
(5) A determination under this regulation is subject to Parts 4, 5 and 6 of TMA (assessment, appeals, collection and recovery) as if—
and those Parts of that Act apply accordingly with any necessary modifications, except that the amount determined is due and payable 14 days after the determination is made.
(6) If paragraph (1)(a) applies and an officer of Revenue and Customs does not make a determination under paragraph (2), either the contractor or the sub-contractor may on giving notice to an officer of Revenue and Customs, apply to the General Commissioners to determine the matter.
(7) For the purposes of paragraph 3(1)(a) of Schedule 3 to TMA[19] (rules for assigning proceedings to General Commissioners), the relevant place for an appeal against a determination under this regulation is the place where the determination was made.
(8) If paragraph (1)(a) applies—
Interest on amounts overdue
14.
—(1) This regulation applies if a contractor has not paid to the Commissioners for Her Majesty's Revenue and Customs the total amount which he is liable under these Regulations to pay in respect of a tax year by the reckonable date.
(2) Any unpaid amount carries interest at the prescribed rate from the reckonable date until payment ("the interest period").
(3) Paragraph (2) applies even if the reckonable date is a non-business day as defined by section 92 of the Bills of Exchange Act 1882[20].
(4) But paragraph (2) does not apply to any amount which the contractor does not have to pay as a result of a direction under regulation 9(5).
(5) Any change made to the prescribed rate during the interest period applies to the unpaid amount from the date of the change.
(6) The "prescribed rate" means the rate applicable under section 178 of the Finance Act 1989[21] (setting of rates of interest) for the purposes of section 86 of TMA (interest on overdue tax).
(7) The "reckonable date" means—
Interest on amount overpaid
15.
—(1) This regulation applies if an amount is repaid to a contractor after the end of the tax year in respect of which the amount was paid.
(2) The amount repaid carries interest at the prescribed rate from the relevant time until the order for the repayment is issued ("the interest period").
(3) In paragraph (2) "the relevant time" means—
(4) Any change made to the prescribed rate during the interest period applies to the amount repaid from the date of the change.
(5) "The prescribed rate" means the rate applicable under section 178 of the Finance Act 1989 for the purposes of section 824 of ICTA[22] (repayment supplements).
Recovery of amount unpaid and interest
16.
—(1) In this regulation, "the unpaid amount" means any amount or interest which a contractor is liable to pay under regulation 10(6), 11(8), 12(2)(b) or 13(2).
(2) Part 6 of TMA (collection and recovery) applies to the recovery of the unpaid amount as if it were income tax charged on the contractor but with the modification indicated in paragraph (3).
(3) Summary proceedings for the recovery of the unpaid amount may be brought in England and Wales or Northern Ireland at any time before the end of the period which applies for the purposes of the regulation, as shown in Table 1.
Table 1
Period for summary proceedings for the recovery of unpaid amount
1. Regulation | 2. Period |
Regulation 10(6), 11(8) and 13(2) |
(a) 12 months after the date on which the unpaid amount became payable, or (b) if a return has been required under regulation 10, 12 months after the date of the delivery of that return to the Commissioners for Her Majesty's Revenue and Customs. |
Regulation 12(2) | 12 months after the date of the certificate. |
(2) If the Commissioners for Her Majesty's Revenue and Customs are satisfied by evidence produced by the applicant that A exceeds B, the applicant shall, subject to paragraph (5), be entitled to repayment of the excess by the Commissioners for Her Majesty's Revenue and Customs.
(3) In paragraph (2)—
(4) An application under this regulation must be made to the Commissioners for Her Majesty's Revenue and Customs containing a declaration that all of the information given in relation to paragraph (3) is correctly stated to the best of the knowledge and belief of the applicant, and where the applicant is a partner in a firm, the form shall be signed by all the partners in the firm who are individuals and, where the partner is a company, by the secretary or a director of the company.
(5) No repayment under this regulation shall be made after the end of the year to which the application relates.
(2) The conditions prescribed in relation to the person making the payment are that—
(3) The condition prescribed in relation to the payment is that the payment is not one made under a construction contract in respect of which the total payments so made (excluding the direct cost of materials) exceed or are likely to exceed £1000.
Work carried out on land owned by person to whom payment is made
19.
—(1) A payment under a construction contract is not a contract payment if—
(2) The conditions prescribed in relation to the person making the payment are that—
(3) The conditions prescribed in relation to the payment are that the payment—
(b) is not one made under a construction contract in respect of which the total payments so made (excluding the direct cost of materials) exceed or are likely to exceed £1000.
(4) For the purposes of paragraph (3)(a)(ii) "agricultural property" means—
Reverse premiums
20.
—(1) Subject to paragraph (2), a payment under a construction contract is not a contract payment if the payment is a reverse premium within the meaning of Schedule 6 to the Finance Act 1999[27] (tax treatment of receipts by way of reverse premium) (see paragraph 1 of that Schedule).
(2) Paragraph 5 of Schedule 6 to the Finance Act 1999 (exclusion of receipts taken into account for capital allowances) does not apply for the purposes of paragraph (1).
Payments as agent of a local education authority
21.
A payment under a construction contract is not a contract payment if the payment is made by the governing body or head teacher of a maintained school as the agent of a local education authority under section 49(5)(b) of the School Standards and Framework Act 1998[28] (delegated budgets).
Payments in respect of property used for business
22.
—(1) A payment under a construction contract is not a contract payment if the payment is made by a person to whom section 59(1)(l) of the Act applies in respect of construction operations relating to property used for the purposes of the business of—
(2) For the purpose of paragraph (1)—
Arrangements involving public bodies
23.
—(1) A payment under a construction contract is not a contract payment if—
(2) For the purposes of this regulation, a transaction is a private finance transaction if—
(3) For the purposes of paragraph (2), "resources" includes—
Charities
24.
A payment under a construction contract is not a contract payment if the payment is made by any body of persons or trust established for charitable purposes only.
(c) utility bills,
(d) council tax bills,
(e) current passport,
(f) driving licence,
(g) company registration number,
(h) company's memorandum and articles of association.
(2) An officer of Revenue and Customs may require that any of the documents, records or information required under paragraph (1) be produced by the applicant in person.
(3) If the Commissioners for Her Majesty's Revenue and Customs are not satisfied with the documents, records or information provided under paragraph (1), they may refuse to register the applicant for payment under deduction by notice stating the reasons for the refusal ("the refusal notice").
(4) An officer of Revenue and Customs may at any time make a determination cancelling a person's registration for payment under deduction with immediate effect by notice stating the reasons for the cancellation ("the cancellation notice") if they have reasonable grounds to suspect that the person—
(5) A person may appeal against a notice or refusal specified in column 1 of Table 2 by giving notice to an officer of Revenue and Customs within 30 days of the event specified in column 2 stating the person's reasons for appeal stated in column 3.
Table 2
Column 1: appeal | Column 2: timing event | Column 3: reasons for appeal |
Appeal against a refusal notice. | Issue of the refusal notice. | Reasons for believing the application should not have been refused. |
Appeal against a cancellation notice. | Issue of the cancellation notice. | Reasons for believing the registration should not have been cancelled. |
Refusal to register for payment under deduction under section 66(7) of the Act (registration following cancellation of registration for gross payment). | Cancellation of registration for gross payment | Reasons for believing the person should have been registered for payment under deduction. |
Minimum turnover
28.
—(1) The minimum turnover for the purposes of paragraph 3(1) of Schedule 11 to the Act is £30,000.
(2) The amount specified for the purposes of paragraph 7 of Schedule 11 to the Act is £200,000.
(3) The amount specified for the purposes of paragraph 11 of Schedule 11 to the Act is £200,000.
Evidence prescribed to satisfy the turnover test
29.
—(1) The evidence prescribed for the purposes of paragraphs 3(1), 7(1) and 11(1) of Schedule 11 to the Act is—
(d) documentary evidence of operations carried out by the business during the qualifying period which demonstrate that the operations amounted to construction operations.
(2) In the case of a new business carried on by a firm or company where there is no evidence as prescribed in sub-paragraphs (a), (c) or (d) of paragraph 1, the evidence prescribed for the purposes of paragraphs 7(1) and 11(1) of Schedule 11 to the Act is—
This is subject to paragraph (4).
(3) The evidence specified is—
(c) invoices for operations carried out by the transferor during the qualifying period which demonstrate that the business operations amounted to construction operations;
(d) evidence that the transferor would have satisfied the compliance test in paragraphs 4, 8 or 12 of Schedule 11 to the Act at the date of the transfer.
(4) The evidence prescribed in paragraph (2) may only be given in relation to one application for registration for gross payment.
(5) For the purposes of this regulation and regulation 31—
(c) for the purposes of paragraph 11(1) of Schedule 11 of the Act, in relation to companies, the minimum turnover for the purposes of that sub-paragraph.
Number of partners or relevant persons
30.
For the purposes of paragraphs 7(2)(a) and 11(2)(a) of Schedule 11 to the Act if the number of partners or relevant persons as the case may be has fluctuated over the qualifying period, the number of partners or relevant persons is the maximum number of partners or relevant persons at any one time in the qualifying period.
Turnover test treated as satisfied in prescribed circumstances
31.
A person, firm or company which does not satisfy the condition in paragraphs 3(1), 7(1) or 11(1) of Schedule 11 to the Act, as appropriate, is treated as satisfying that condition if an officer of Revenue and Customs is satisfied that—
Exceptions from compliance obligations
32.
—(1) The obligations and requests prescribed for the purposes of paragraphs 4(3), 8(2) and 12(2) of Schedule 11 to the Act are given in column 1 of Table 3.
(2) The circumstances prescribed in which the applicant or company is to be treated as satisfying the conditions in paragraphs 4(1), 8(1) or 12(1) of Schedule 11 to the Act as regards each of the prescribed obligations are given in column 2 of Table 3.
Table 3
1. Prescribed obligations | 2. Prescribed circumstances |
Obligation to submit monthly contractor return within the required period. |
(1) Return is submitted not later than 28 days after the due date, and (2) the applicant or company—
(b) has failed to comply with this obligation on not more than two occasions within the previous 12 months. |
Obligation to pay—
(b) tax liable to be deducted under the PAYE Regulations. |
(1) Payment is made not later than 14 days after the due date, and (2) the applicant or company—
(b) has failed to comply with this obligation on not more than two occasions within the previous 12 months. |
Obligation to pay income tax. |
(1) Payment is made not later than 28 days after the due date, and (2) the applicant has not otherwise failed to comply with this obligation within the previous 12 months. |
Obligation to submit a return under regulation 73, 74 and 85 of the PAYE Regulations (annual returns) within the required period. | Return is submitted after the due date. |
Obligation to pay corporation tax for which the applicant or company is liable. |
(1) Payment is made not later than 28 days after the due date, and (2) any shortfall in that payment has incurred an interest charge but no penalty. |
Obligation to submit a self-assessment return within the required period. | Return is submitted after the due date. |
Obligations and requests referred to in paragraphs 4(1), 8(1) and 12(1) of Schedule 11 to the Act. | The failure to comply occurred before the appointed day and was within section 562(10), 564(4) or 565(4) of ICTA (conditions to be satisfied: minor and technical failures). |
the evidence is any document from the Social Security Department or equivalent department, or from the immigration authorities, or from any other Government department of the country in which he claims to have been living which confirms his presence throughout that part of the qualifying period.
Absence abroad – evidence of compliance with tax obligations
34.
—(1) The evidence required to satisfy the Commissioners for Her Majesty's Revenue and Customs for the purposes of paragraph 4(5)(b) of Schedule 11 to the Act that the applicant has complied with any obligations imposed under the tax laws of any country in which he was living during any part of the qualifying period which are comparable to the obligations mentioned in paragraph 4(1) of that Schedule is prescribed in paragraph (2).
(2) The evidence is such notice or documents issued by the Revenue Department or equivalent department of the country in which the applicant claims to have been living as confirms that the obligations have been complied with.
Evidence of unemployment
35.
—(1) The evidence required to satisfy the Commissioners for Her Majesty's Revenue and Customs for the purposes of paragraph 4(5)(a) of Schedule 11 to the Act that the applicant was not subject to any one or more of the obligations mentioned in paragraph 4(1) of that Schedule because he was unemployed is prescribed in paragraphs (2) and (3).
(2) If the applicant claims to have been living within the United Kingdom during any period, the evidence is—
(3) If the applicant claims to have been living outside the United Kingdom during any period, the evidence is any document from the Social Security Department or equivalent department, or from the immigration authorities, or from any other Government Department of the country in which he claims to have been living, which confirms his presence there throughout that period.
(4) In paragraph (2), "benefit officer" means appropriate officer of the Department for Work and Pensions or, in Northern Ireland, the appropriate officer of the Department of Health and Social Services for Northern Ireland.
Evidence of full-time education
36.
—(1) The evidence required to satisfy the Commissioners for Her Majesty's Revenue and Customs for the purposes of paragraph 4(5)(a) of Schedule 11 to the Act that the applicant was not subject to any one or more of the obligations mentioned in paragraph 4(1) of that Schedule because he was undergoing full-time education is prescribed in paragraphs (2) and (3).
(2) If the applicant claims to have been living within the United Kingdom, the evidence is a statement from the educational institution which the applicant attended, certifying the periods during which the applicant was undergoing full-time education at that institution.
(3) If the applicant claims to have been living outside the United Kingdom during any period, the evidence is a statement from the educational institution which the applicant attended, in the country in which the applicant claims to have been living, certifying the periods during which the applicant was undergoing full-time education at that institution.
Interpretation
37.
In this Part—
Whether information has been delivered electronically
39.
For the purpose of these Regulations, information is taken to have been delivered to an official computer system by an approved method of electronic communications only if it is accepted by that official computer system.
Proof of content of electronic delivery
40.
—(1) A document certified by an officer of Revenue and Customs to be a printed-out version of any information delivered by an approved method of electronic communications is evidence, unless the contrary is proved, that the information—
(2) A document which purports to be a certificate given in accordance with paragraph (1) is presumed to be such a certificate unless the contrary is proved.
Proof of identity of person sending or receiving electronic delivery
41.
The identity of—
is presumed, unless the contrary is proved, to be the person recorded as such on an official computer system.
Information sent electronically on behalf of a person
42.
—(1) Any information delivered by an approved method of electronic communications—
on behalf of a person is taken to have been delivered by that person.
(2) But this does not apply if the person proves that the information was delivered without the person's knowledge or connivance.
Proof of delivery of information sent electronically
43.
—(1) The use of an approved method of electronic communications is presumed, unless the contrary is proved, to have resulted in the delivery of information—
(2) The use of a method of electronic communications is presumed, unless the contrary is proved, not to have resulted in the delivery of information—
(3) The time of receipt or despatch of any information delivered by a method of electronic communications is presumed, unless the contrary is proved, to be the time recorded on an official computer system.
Proof of payment sent electronically
44.
—(1) The use of a method of electronic communications is presumed, unless the contrary is proved, to have resulted in the making of a payment—
(2) The use of a method of electronic communications is presumed, unless the contrary is proved, not to have resulted in the making of a payment—
(3) The time of receipt or despatch of any payment sent by a method of electronic communications is presumed, unless the contrary is proved, to be the time recorded on an official computer system.
Mandatory electronic payment
45.
—(1) If an e-payment notice has been issued to a contractor in respect of a tax year under regulation 199 of the PAYE Regulations, he must pay the specified payment using an approved method of electronic communications.
(2) Paragraph (1) applies regardless of whether a payment of tax is due under regulation 68 of the PAYE Regulations (payment and recovery of tax by employer).
(3) If the Commissioners for Her Majesty's Revenue and Customs have given directions under regulation 199(3) of the PAYE Regulations in relation to a contractor, the specified payment must be made in accordance with those directions.
Contractor in default if specified payment not received by applicable due date
46.
—(1) This regulation applies if a contractor is required to make a specified payment by an approved method of electronic communications in accordance with regulation 45.
(2) The contractor is in default if the specified payment is not received in full by Her Majesty's Revenue and Customs (whether by an approved method of electronic communications or otherwise) on or before the date by which that payment is required in accordance with regulation 7 ("the applicable date").
(3) But the contractor is not in default if—
(4) Inability to pay is not a reasonable excuse for the purposes of sub-paragraph (3)(a).
(5) A payment is not treated as received in full by Her Majesty's Revenue and Customs on or before the date by which that payment is required in accordance with regulation 7 unless it is made in a manner which secures (in a case where the payment is made otherwise than in cash) that, on or before that date, all transactions can be completed which need to be completed before the whole amount of the payment becomes available to the Commissioners for Her Majesty's Revenue and Customs.
Default notice and appeal
47.
—(1) An officer of Revenue and Customs must issue a default notice to any person who appears to be in default under regulation 46 in respect of a specified payment.
(2) A person may appeal against a default notice by giving notice to an officer of Revenue and Customs within 30 days of the issue of the default notice.
(3) The ground of appeal is that the person is not in default.
(4) If the appeal is successful the default notice must be withdrawn.
(5) Regulation 59 (appeals: supplementary provisions) applies to appeals under this paragraph.
Default surcharge
48.
—(1) A contractor in default in respect of any specified payment to whom—
have been issued, is liable to a surcharge.
(2) The surcharge is the sum of the surcharges, calculated in accordance with paragraph (3), in respect of each default relating to the tax year in which were made the contract payments to which the specified payment referred to in paragraph (1) relates.
(3) The surcharge in respect of each default is the specified percentage of (A - B).
(4) In paragraph (3)—
(c) the specified percentage is determined by reference to the number of the default during a surcharge period in accordance with Table 4.
Table 4
Specified percentage for each default in a surcharge period
1 Default number (within a surcharge period) | 2 Specified percentage |
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th |
0% 0% 0.17% 0.17% 0.17% 0.33% 0.33% 0.33% 0.58% 0.58% 0.58% 0.83% |
(5) A surcharge period is a period which—
(6) A surcharge payable under this paragraph is payable 30 days after the issue of the surcharge notice.
(7) Section 102 of TMA[31] (mitigation of penalties) applies to a surcharge payable under this paragraph as if it were a penalty.
Surcharge notice and appeal
49.
—(1) An officer of Revenue and Customs must issue a surcharge notice to a contractor who has been in default on three or more occasions during a surcharge period and consequently will be liable to a surcharge under regulation 48.
(2) The surcharge notice must show the total surcharge liability for the tax year.
(3) The surcharge notice must be issued within 6 years of—
(4) A contractor may appeal against a surcharge notice by giving notice to an officer of Revenue and Customs within 30 days of the issue of the surcharge notice.
(5) The grounds of appeal are—
(6) But paragraph (5)(a) does not apply in respect of a disputed default which has already been the subject of an appeal under regulation 49, following which the default notice was not withdrawn.
(2) This regulation is without prejudice to any other power of the Commissioners for Her Majesty's Revenue and Customs to delegate their functions
Inspection of records of contractors and sub-contractors
51.
—(1) Whenever required to do so by a person nominated by the Commissioners for Her Majesty's Revenue and Customs, a contractor must produce to that person all contractor records, or such contractor records as may be specified by that person, for inspection at the prescribed place and at such time as that person may reasonably require.
(2) "Contractor records" means all documents and records relating to—
in the tax years or tax periods specified by the nominated person.
(3) Whenever required to do so by a person nominated by the Commissioners for Her Majesty's Revenue and Customs, a person who is or has within the preceding three tax years been a sub-contractor must produce to that person all sub-contractor records, or such sub-contractor records as may be specified by that person, for inspection at the prescribed place and at such time as that person may reasonably require.
(4) "Sub-contractor records" means all documents and records relating to—
(5) "The prescribed place" means such place in the United Kingdom as the contractor or sub-contractor and the nominated person may agree upon, or in the absence of agreement—
(6) The nominated person may—
(7) If any document is removed in accordance with paragraph (6)(b), the nominated person must provide—
(8) If a lien is claimed on a document produced in accordance with paragraph (1) or (3), the removal of the document under paragraph (6)(b) is not to be regarded as breaking the lien.
(9) If records are maintained by computer, the person required to make them available for inspection must provide the nominated person with all facilities necessary for obtaining information from them.
(10) For the purposes of this regulation, a contractor and a sub-contractor must keep, for not less than three years after the end of the tax year to which they relate, all contractor records or sub-contractor records as the case may be which are not required to be sent to the Commissioners for Her Majesty's Revenue and Customs by other provisions of these Regulations.
Inspection of records of sub-contractors – additional provisions
52.
—(1) Where a sum deducted under section 61 of the Act is treated as paid on account of the liabilities mentioned in regulation 56(2) (application by Commissioners for Her Majesty's Revenue and Customs of sums deducted under section 61), the sub-contractor, whose liabilities they are, shall—
(2) The records are all documents and records relating to the calculation of—
(3) "The prescribed place" means such place in the United Kingdom as the sub-contractor and the nominated person may agree upon, or in the absence of agreement—
(4) The nominated person may—
(5) If a lien is claimed on a document produced in accordance with paragraph (1)(b), the removal of the document under paragraph (4)(b) is not to be regarded as breaking the lien.
(6) If records are maintained by computer, the person required to make them available for inspection must provide the nominated person with all facilities necessary for obtaining information from them.
Information as to change of control of close company
53.
—(1) This regulation applies to a company which—
(2) Where there is a change in the control of the company by reason of an issue or transfer of shares in the company to a person who was not a shareholder in the company immediately before the issue or transfer, the company shall, within 30 days of the issue or of receiving information as to the transfer, give notice to the Commissioners for Her Majesty's Revenue and Customs of the name and address of the person to whom the shares were issued or transferred.
(3) In this regulation "control" has the same meaning as in section 840 of ICTA.
Death of contractor
54.
If a contractor dies, anything which he would have been liable to do under these Regulations must be done by his personal representatives.
Service by post
55.
Any notice which is authorised or required to be given, served or issued under these Regulations may be sent by post.
Application by the Commissioners for Her Majesty's Revenue and Customs of sums deducted under section 61
56.
—(1) This regulation applies to sums deducted from contract payments made to a sub-contractor which is a company ("the qualifying sub-contractor").
(2) So much of any sum deducted under section 61 of the Act by a contractor in a tax year and paid to the Commissioners for Her Majesty's Revenue and Customs as is required shall be applied—
(3) So much of any sum deducted under section 61 of the Act as is not required to discharge the sub-contractor's liabilities specified in paragraph (2) shall be repaid to the qualifying sub-contractor.
This is subject to the qualifications in paragraphs (5) and (6).
(4) Regulation 83 of the PAYE Regulations (interest on tax overpaid) shall apply to any sum repaid under paragraph (3) and any such sum shall be treated as tax repaid for the purposes of that regulation.
(5) The Commissioners for Her Majesty's Revenue and Customs shall not repay any sum deducted under section 61 of the Act to the qualifying sub-contractor until—
(6) If it appears to an officer of Revenue and Customs that there is an outstanding liability of the qualifying sub-contractor in respect of corporation tax due for an accounting period ending before the relevant payment is made under section 61 of the Act, the amount required to discharge that liability shall be retained by the Commissioners for Her Majesty's Revenue and Customs and applied in discharge of that liability.
(7) In paragraph (2)(e), "the relevant recovery provision" means—
Certificate that sum due
57.
—(1) A certificate of an officer of Revenue and Customs that, to the best of his knowledge and belief, any amount shown in a certificate under the regulations listed in paragraph (2) has not been paid by a contractor, is sufficient evidence that the amount mentioned in the certificate is unpaid and due to the Crown.
(2) The regulations are—
(3) A certificate of an officer of Revenue and Customs that, to the best of his knowledge and belief, any amount of interest payable under the regulation 14 (interest on amounts overdue) has not been paid by a contractor, is sufficient evidence that the amount mentioned in the certificate is unpaid and due to the Crown.
(4) The production of—
is sufficient evidence that the amount shown in the certificate is the amount of tax which the contractor is liable to pay to the Commissioners for Her Majesty's Revenue and Customs in respect of the tax period in question.
(5) A document which purports to be a certificate under paragraph (1) or (3) is treated as such a certificate until the contrary is proved.
Payment by cheque
58.
—(1) For the purposes of the following provisions, if—
the payment shall be treated as made on the day which the cheque was received by the Commissioners for Her Majesty's Revenue and Customs.
(2) The provisions are—
Appeals: supplementary provisions
59.
—(1) The following provisions of TMA apply to appeals under regulation 47 (default notice and appeal), as they apply to an appeal under section 31 of TMA[39]—
(2) In an appeal under regulation 47 or regulation 49(4) (surcharge notice and appeal), the relevant place for the purposes of paragraph 3(1)(a) of Schedule 3 to TMA[40] (rules for assigning proceedings to General Commissioners) is the place which at the time of the notice of appeal is—
(3) In paragraph (2)—
Transitional provisions, savings and revocation
60.
—(1) Schedule 1 (transitional provisions and savings) has effect.
(2) The Regulations listed in column 1 of Schedule 2 are revoked to the extent specified in column 3 of that Schedule.
(3) Paragraph (2) is subject to Schedule 1.
David Varney
Helen Ghosh
Two of the Commissioners for Her Majesty's Revenue and Customs
25th July 2005
has effect after that commencement as if done under or for the purposes of the corresponding provision of these Regulations.
4.
Any reference (express or implied) in these Regulations or any document made under these Regulations to—
is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding provision of the revoked Regulations had effect, a reference to the provision of the revoked Regulations or to things done or falling to be done under or for the purposes of the provision of the revoked Regulations.
5.
Any reference (express or implied) in these Regulations to—
is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding provision repealed by the Act had effect, a reference to the repealed provision or to things done or falling to be done under or for the purposes of the repealed provision.
6.
Any reference (express or implied) in these Regulations to contractors, sub-contractors, construction operations or similar concepts created by the Act is to be read as including, in relation to times, circumstances or purposes in relation to which any corresponding concept which has been superseded by the Act had effect, a reference to the superseded concept.
7.
Paragraphs 4, 5 and 6 apply only in so far as the context permits.
8.
Paragraph 6 is without prejudice to the generality of paragraph 5.
9.
These Regulations have effect in relation to sums liable, under the Income Tax (Sub-contractors in the Construction Industry) Regulations 1993[41], to be deducted or accounted for in respect of payments made before the appointed day as if the sum had been liable to be deducted or accounted for under these Regulations.
10.
Paragraph 9 is without prejudice to the generality of paragraphs 1 to 8.
11.
Paragraphs 1 to 10 have effect instead of paragraph (b) of section 17(2) of the Interpretation Act 1978[42].
General saving for old savings
12.
—(1) The revocation by these Regulations of a provision previously revoked subject to savings does not affect the continued operation of those savings.
(2) The revocation by these Regulations of a saving on the previous revocation of a provision does not affect the operation of the saving in so far as it is not specifically reproduced in these Regulations but remains capable of having effect.
Interpretation
13.
In this Part of this Schedule, "the revoked Regulations" means the Regulations which are revoked by these Regulations.
1. Regulations revoked | 2. Reference | 3. Extent of revocation |
The Income Tax (Sub-contractors in the Construction Industry) Regulations 1993 | 1993/743 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 1995 | 1995/217 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment No. 2) Regulations 1995 | 1995/448 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 1996 | 1996/981 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 1998 | 1998/2622 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 1999 | 1999/825 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment No. 2) Regulations 1999 | 1999/2159 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 2000 | 2000/1151 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment No. 2) Regulations 2000 | 2000/1880 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry and Employments) (Amendment) Regulations 2000 | 2000/2742 | The whole instrument to the extent not already revoked[43]. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 2001 | 2001/1531 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 2002 | 2002/2225 | The whole instrument. |
The Income Tax (Sub-contractors in the Construction Industry and Employments) (Amendment) Regulations 2003 | 2003/536 | The whole instrument to the extent not already revoked[44]. |
The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 2004 | 2004/1075 | The whole instrument. |
[4] 1970 c. 9. Section 98A was inserted by section 165 of the Finance Act 1989 (c. 26) and amended by section 722 of and paragraphs 123 and 138 of Schedule 6 to the Income Tax (Earnings and Pensions) Act 2003 (c. 1) and paragraph 8 of Schedule 12 to the Finance Act 2004.back
[7] 2003 c. 1. The Income Tax (Earnings and Pensions) Act 2003 is referred to in these footnotes as "ITEPA".back
[9] Section 98A was inserted by section 165 of the Finance Act 1989 (c. 26) and amended by sections 722 and 723 of, and paragraphs 123 and 138 of Schedule 6 and Schedule 7 to, ITEPA and prospectively amended by sections 76 and 77 of and paragraph 8 of Schedule 12 to, the Finance Act 2004.back
[10] S.I. 1993/743. Regulation 40A was inserted by the Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 1998 (1998/2622) and amended by regulation 8 of the Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 2001 (2001/1531).back
[12] Paragraph 3B was inserted in Schedule 1 to the Social Security Contributions and Benefits Act 1992 (c. 4) by section 77(2) of the Child Support, Pensions and Social Security Act 2000 (c.19), and in Schedule 1 to the Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7) by section 88(2) of the Child Support, Pensions and Social Security Act 2000.back
[17] S.R. (N.I.) 2000 No.121.back
[19] Schedule 3 was substituted by paragraph 10 of Schedule 22 to the Finance Act 1996 (c. 8) and paragraph 3 of Schedule 3 was amended by paragraph 142 of Schedule 6 to ITEPA.back
[20] 1882 c. 61; section 92 was amended by sections 3(1) and 4(4) of the Banking and Financial Dealings Act 1971 (c. 80).back
[21] 1989 c. 26, to which there are amendments not relevant to these Regulations.back
[22] Section 824 was amended by paragraph & of Schedule 17 to the Finance Act 1988 (c. 39), sections 110(5), 111(4), 158(2) and 179(1) of, and Parts 4, 8 and 10 of Schedule 17 to, the Finance Act 1989 (c. 26), paragraph 14(52) of Schedule 10 to the Taxation of Chargeable Gains Act 1992 (c. 12), paragraph 41 of Schedule 19 to the Finance Act 1994 (c. 9), section 92 of the Finance Act 1997 (c.16), section 41 of the Finance Act 1999 (c. 16), section 90 of the Finance Act 2001 (c. 9) and paragraph 104 of Schedule 6 to ITEPA.back
[23] Section 65 was amended by section 57(1) of the Finance Act 1984 (c. 43) and paragraph 30 of Schedule 19 to the Finance Act 1998 (c. 36); section 66 was amended by section 57(2) of the Finance Act 1984, section 89(1) of the Finance Act 2001 (c. 9), S.I. 1980/397 (N.I. 3) and S.I. 1991/724; section 67 was amended by section 58 of the Finance Act 1976 (c. 40), section 156 of the Finance Act 1995 (c. 4) and section 89(1) of the Finance Act 2001.back
[24] S.I. 1993/743. Regulation 7 was amended by regulation 7 of S.I. 1998/2622.back
[25] Section 257 and 257A were substituted by section 33 of the Finance Act 1988. Section 257 was amended by section 33(4)(a) and (5)(b) of the Finance Act 1989 (c. 26), paragraph 13 of Schedule 20 and Schedule 41 Part V(10) to the Finance Act 1996 (c. 8), section 29(1) of the Finance Act 2002 (c. 23), article 2(1) of S.I. 2001/3773 and article 2(2) of S.I. 2002/2930. Section 257A was amended by section 33(8) (a) and (9)(b) of the Finance Act 1989 (c. 26), paragraph 14 of Schedule 20 to the Finance Act 1996 (c. 8), section 77 (2) and (7) of the Finance Act 1994 (c. 9), section 30(7) and (11), section 31 and Schedule 20 Part III(3) of the Finance Act 1999 (c.16), section 60 and Schedule 6 of the Tax Credit Act 2002 (c. 21) and article 2(3) of S.I. 2002/2930.back
[26] Section 57B was inserted by sections 193 and 199(1) and (2)(a) of the Finance Act 1994 and modified by paragraph 31(1) and (3) of Schedule 21 to the Finance Act 1995 (c. 4).back
[29] S.I. 1994/1882, amended by S.I. 2003/672.back
[31] Section 102 was amended by section 168(4) of the Finance Act 1989 (c. 26).back
[32] 1998 c.30. Regulations made under section 22(5) of the Teaching and Higher Education Act 1998 and section 73B(3) of the Education (Scotland) Act 1980 are the Education (Student Loans) (Repayment) Regulations 2000 (S.I. 2000/944).back
[33] 1980 c.44. Section 73B was inserted by section 29(2) of the Teaching and Higher Education Act 1998.back
[34] S.I. 1998/1760 (N.I. 14). Relevant instruments under this Order are S.R. 1999 Nos. 192 and 370.back
[37] S.I. 1994/1882. The relevant amending instruments are S.I. 1195/566, 2002/225 and 2004/698.back
[38] S.R. 1994 No. 271. The relevant amending instruments are S.R. 1995 No. 74, S.I. 2002/225 and 2004/698.back
[39] Sections 31 to 31D were substituted by paragraph 11 of Schedule 29 to the Finance Act 2001 (c. 9).back
[40] Schedule 3 was substituted by paragraph 10 of Schedule 22 to the Finance Act 1996 (c. 8), and paragraph 3 of Schedule 3 was amended by paragraph 142 of Schedule 6 to ITEPA.back
[41] S.I. 1993/743, as amended by S.I. 1995/217, S.I. 1995/448, S.I. 1996/981, S.I. 1998/2622, S.I.1999/825, S.I.1999/2159, S.I. 200/1151, S.I.200/1880, S.I.2000/2742, S.I. 2001/1531, S.I. 2002/2225, S.I.2003/536 and S.I. 2004/1075.back
[43] Regulation 3 of S.I. 2000/2742 was revoked by S.I. 2003/2682.back
[44] Regulations 1(2), the definition of "the Employments Regulations", and 9 of S.I. 2003/536 were revoked by S.I. 2003/2682.back