CISR43080 - Register and maintain subcontractor: Tax Treatment Qualification Test (TTQT) - Employer tax debts
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The Tax Treatment Qualification Test (TTQT) will as part of its review, test whether the subcontractor where they act as an employer / contractor made their payments / returns on time. When testing whether payments have been made on time, some special situations may arise as detailed below.
Months 12 and 13 employer payments due
Up until the 23r d November 2009, any TTQT run either at Registration, scheduled review, ‘Ad-hoc’ or ‘Information only’, would have identified any late or outstanding payments as an employer or contractor for all months (including months 12 & 13) during the ‘qualifying period’. From 23r d November 2009, TTQT now ignores any failures at months 12 & 13 that have been paid by 19t h or 22n d July for the purposes of determining whether the TTQT is a ‘Pass’ or a ‘Fail’. This is because TTQT cannot automatically identify the correct due date of any payments made in respect of Class 1A NIC which falls due by 19t h or 22n d July each year (depending on the method of payment).
However, the fact that TTQT now ignores these obligations does not mean, for the purposes of the Compliance Test, that these obligations cannot be brought into account in any Manual Compliance Test undertaken. Any late payments identified manually at months 12 & 13 in respect of PAYE paid later than 19t h or 22nd April may still be taken into consideration.
Quarterly payment cases
When TTQT runs and the system checks the payments made by the subcontractor in their capacity as a contractor / employer who pays quarterly, the system will only check for payments made on time in months 3, 6, 9 & 12. Where the contractor has made quarterly payments but incorrectly used payslips intended for other months such as 1, 2, 3 & 4 (for example), the automated TTQT will fail as there are no payments in months 6, 9, 12 and Month 3 appears to be paid late.
When carrying out a manual TTQT check or as a result of an appeal submitted by the subcontractor, if it is obvious that this is what has happened you may amend the automated TTQT result where you are satisfied that it should have passed, or uphold any appeal made in favour of the subcontractor.