CISR46100 - Register and maintain subcontractor: compliance test: 'reason to expect' test

You should normally use the 'reason to expect test' as an additional reason to refuse gross status where there are already other grounds for refusal.

It can be applied where there is no major infringement of the compliance test rules within the 12 months up to the application date but you still consider there to be strong grounds for doubting the applicant's future compliance. The Board's policy is that gross payment status should not be issued to subcontractors who have gaps in their tax history or who have seriously neglected their tax obligations in the past.

This test should not be used to fail an application wherever the applicant has had a poor compliance record outside the 12 months up to the date of application. In cases of exceptional difficulty in making a judgement like this, you should refer to the CIS Advisory Team (See CISR97030) for advice.

Companies - additional points

There must be reason to expect that a company will comply with its obligations and requests in respect of taxation, National Insurance and the Companies Act after the end of the qualifying period. You should consider

• the company's compliance in the past
• the persons who influence the conduct of the company's affairs - the directors, and where the company is close, the beneficial shareholders - taking account of those individuals' obligations as set out in FA04/SCH11/PART1/PARA4.