Construction Industry Scheme - CIS3300

Certificates: business test: introduction

BUSINESS TEST: INTRODUCTION

This paragraph serves as an introductory overview for the business test; for deeper coverage use the above links to information or action guides

This module covers the application of the business test to subcontractors applying for Certificates and some background detail on the separate aspects of that test.

Subcontractors Tax Certificates are valuable documents, since they allow the holder to receive payment gross of any deductions. Issuing them to the wrong people can lead to serious tax losses so it is important that they should only be issued to genuine businesses which have a genuine requirement for the Certificate.

The purpose of the business test is to establish that the applicant is carrying on a genuine business involving construction operations.

THE LEGAL REQUIREMENTS

The business test for individuals, partnerships and companies is defined in the following provisions:

• for individuals, in ICTA88\s562 (2)

• for partnerships, in ICTA88/s564 (2)

• for companies, in ICTA88/s565 (2)

These provisions require that:

• the applicant is carrying on a business in the United Kingdom

• the business consists of, or includes, carrying out construction operations, or supplying workers to carry out construction operations

• the business is, to a substantial extent, carried on by means of an account with a bank

• the business is carried on with proper records

• the business is carried on from proper premises with proper equipment, stock and other facilities

More detailed information about these requirements is contained in the paragraphs under the information menu. A checklist for the business test is presented as an action guide available from the action guide menu.
CIS forms
glossary
Where am I?
Quick links index- cross reference on CIS0100