CISR43060 - Register and maintain subcontractor: gross payment or payment under deduction: No Compliance History cases

‘No History’ cases with a National Insurance Number (NINO)

Where a new subcontractor registers for gross tax treatment CIS will run the Tax Treatment Qualification Test (TTQT) see CISR43070. However where the system indicates ''No SA Returns due'', this application will be passed to the ''Incomplete TTQT'' work pool for a manual TTQT check to be undertaken. This work item will be handled in the Processing Office of the subcontractor making the application. When working the work item you will need to use ''COP'' or ''TBS'' to trace an employment record for the applicant to check their employment history, you should also issue a CIS309 to the applicant asking them to supply evidence to you of the turnover, shown on their registration form.

Form CIS309 is available from the SEES package entitled ‘Emp Comp & Const Ind’. The form asks the applicant to provide evidence to confirm the turnover shown on the application form and can include the following:

• bank statement
• paid invoices
• paid cheques
• books and accounts of the business

The applicant is given a period of 21 days in which to respond to the CIS309. If the subcontractor is unwilling to put their evidence through the post, then provided that they make an appointment at the Enquiry Centre of their choice, they will be able to take the evidence into that Enquiry Centre, where they will be given a receipt for the evidence produced. This will then be passed by the Enquiry Centre to the section that requested sight of this.

If the evidence of turnover is produced and you are satisfied that the evidence backs up the figures shown on the application, and all other areas of the application are also satisfactory, you will need to finalise the unconfirmed TTQT result as a ‘pass’ by using the ‘Manage TTQT’ function (see the table below).If however no reply is received to the CIS309 and the TTQT has an ‘Unconfirmed’ status, you should finalise the TTQT as a fail result, again using the function ‘Manage TTQT’.

When using this function you should select the ‘miscellaneous’ fail reason, and then enter in ‘free-format’ a fail reason of “Evidence of Turnover not provided as requested”, this text will then appear on the CIS308 when it is issued to the applicant. The applicant will then remain on net payment status.

If the applicant subsequently provides the turnover evidence shortly after the CIS308 has been issued and that evidence is satisfactory, then you should run an ‘Information only’ TTQT (see CISR43100), and if this finds that the applicant passes the Compliance Test, then you should change the tax treatment from net to gross using the function ‘Change TT’ (see CISR43630).

Note when requesting the ‘Information only’ TTQT, bear in mind that the ‘qualifying period’ will be up to the date the original application for gross payment status was made. Your ‘Information only’ TTQT will however look back 12 months from the date of your request, you should therefore ensure that had the TTQT been run for the 12 months up to the date of the original application that the TTQT result would have been the same.

‘No History’ cases without a National Insurance Number (NINO)

Where a new subcontractor registers for gross tax treatment the applicant will be asked to attend an Enquiry Centre for an Identity check. The applicant will be asked to take with them evidence to support their Turnover as shown on their registration form, and evidence to support that they pass the business test. If the applicant has entered the United Kingdom from abroad they should also be asked to produce evidence to show that they have met all of their taxation obligations in the emigrating country (translated into English) in order to prove that they will also pass the Compliance Test. More information can be found regarding these registration applications in the Action Guide at CISR43640.

Once this information has been obtained and the evidence seen the registration form should be passed to the CIS Registration Team at the National Insurance Contributions Office (NICO) for processing, where you are satisfied with the evidence that the applicant has produced to you which confirms that the Business, Turnover and Compliance Tests are passed. Where you have doubt that any one of these Tests have been passed, you should follow the guidance in the Action Guide at CISR43640.

Where the subcontractor attends the Enquiry Centre you should refer to CISR42140 for detailed information to enable you to carry out the Identity checks required.