ECH21215 - CIS from 06-04-07 - Providing False Information for Registration Purposes

A subcontractor must provide certain information when applying to be registered for

• payment under deduction or
• gross payment.

S72 FA2004 provides for a penalty not exceeding £3,000 if

• a false statement is made or
• a false document is furnished
• for the purposes of becoming registered for payment under deduction or gross payment, and
• it is false in a material particular
• and the subcontractor
• knew it to be false or,
• made or furnished it recklessly.

Registration for Gross Payment

Where a subcontractor is registered for gross payment the CIO may discover that a false statement has been made or a false document furnished when considering whether the Business, Turnover and Compliance Tests ( ECH14610) have been satisfied.

The CIO must

• establish the reasons why false information was provided ( ECH8045) and
• whether the application for gross payment would have been successful had the correct information been provided.
• In cases where the CIO establishes that the application for gross payment would have been unsuccessful the CIO must
• consider cancellation of gross payment ( ECH14650)
• send a memo to the relevant Business Team detailing the problems identified and action taken and
• consider a penalty under S72 FA2004 (see below).

In cases where the CIO establishes that the application for gross payment would still have been successful the CIO must

• provide advice to the subcontractor about the importance of providing correct information on any application for registration and
• send a memo to the relevant Business Team detailing the problems identified and action taken.

Registration for Payment Under Deduction

Where a subcontractor is registered for payment under deduction any false statements or documents are likely to be related to the identity of the subcontractor.

Where a CIO identifies a false statement or document in connection with an application for registration for payment under deduction the CIO must

• establish the reasons why false information was provided ( ECH8045) and
• whether the application for payment under deduction would have been successful had the correct information been provided.

In cases where the CIO establishes that the application for payment under deduction would have been unsuccessful the CIO must

• consider withdrawal of payment under deduction.
• send a memo to the relevant Business Team detailing the problems identified and action taken and
• consider a penalty under S72 FA2004 (see below).

In cases where the CIO establishes that the application for payment under deduction would still have been successful the CIO must

• provide advice to the subcontractor about the importance of providing correct information on any application for registration and
• send a memo to the relevant Business Team detailing the problems identified and action taken.

Where a penalty is appropriate the CIO must make a submission to Tax Administration Advice