CISR43030 - Register and maintain subcontractor: gross payment or payment under deduction: changing a subcontractor's tax treatment

A subcontractor’s tax treatment may be:

• changed from gross to net
• changed from net to gross

The changes may be as a result of:

• a request from the subcontractor
• an appeal by the subcontractor against the tax treatment given
• a scheduled review by HMRC
• a compliance officer changing the tax treatment if there is evidence of fraud

Whenever a change is made to a subcontractor’s tax treatment, a notification is issued advising of the intention to change the tax treatment (with the exception where suspected fraud is involved). Where the change is in respect of gross payment status to net payment status, the subcontractor is given the opportunity to appeal against the change in status. See CISR48000 for more information on how to deal with Tax Treatment appeals.