CISR17070 - The Scheme: secondary legislation:
regulation 6
This regulation deals with the verification process: to be read
in conjunction with FA04/S69.
When a contractor intends to make a payment they must contact
HMRC to verify whether a subcontractor, or their nominee, is
registered for the scheme and how they should be paid: SI2005/2045
reg 6(1).
When verifying, SI2005/2045 reg 6(2) requires that a
contractor must provide
- their name, UTR, AO and Employers Reference, and
- in respect of the subcontractor and any nominee
- the name, UTR and NINO (if an individual)
- the name of the partner and the firm, UTR of the firm, UTR or
NINO of the partner if an individual, UTR or CRN if partner is a
company (for partnerships)
- the name of the company, UTR and CRN (for companies)
A contractor must not verify a subcontractor unless a contract
has been awarded to the subcontractor or a tender for work has been
accepted: SI2005/2045 reg 6(3).
A contractor does not need to verify in the following
circumstances
- the subcontractor receiving the payment has been
included on a return made by the contractor in the current or two
previous tax years: SI2005/2045 reg 6(4)(a).
- the payment is made within two years of the
appointed day and the subcontractor receiving the payment has been
included on either a monthly return, or form CIS36, made by the
contractor in the current or two previous tax years: SI2005/2045
reg 6(4)(b).
- if the contractor is a company, the subcontractor
receiving the payment has been included on either a monthly return,
or form CIS36, made by a company within the same group in the
current or two previous tax years: SI2005/2045 reg 6(4)(c).
- where a contractor has made a multiple contractor
election under SI2005/2045 reg 3 and has included the subcontractor
receiving the payment on a monthly return within the current or two
previous tax years in their capacity as a different contractor:
SI2005/2045 reg 6(4)(d).
- the subcontractor receiving the payment has been
included in either a monthly return or form CIS36 in the current or
two previous tax years under a contract held by a business which
has been acquired by the contractor, and where the transfer of the
business has been notified to HMRC: SI2005/2045 reg 6(4)(e).
For the purposes of Reg 4(c), ICTA88/S413 (3)(a) defines whether
two companies are within the same group: SI2005/2045 reg 6(5).
Provided the contractor has verified the subcontractor or
reported a payment to HMRC on either a monthly return or form CIS36
in the current or two previous tax years, HMRC must notify them if
the subcontractor loses the right to gross payment and is
transferred to net payment status (SI2005/2045 reg 6(6)(a)); is
moved from net to gross payment status (SI2005/2045 reg 6(6)(b));
or is de-registered from the scheme completely. (SI2005/2045 reg
6(6)(a) and (b))
The contractor is entitled to assume that any person verified
or notified as being registered for gross or net payment has not
ceased to be so registered: SI2005/2045 reg 6(7).
ENABLING PROVISION – FA04/S69
