ECH21230 - CIS from 06-04-07 - Providing a Subcontractor with an Incorrect Written Statement of Payments and Deductions Made
Regulation 4(8) Income Tax (Construction Industry Scheme)
Regulations 2005 requires a contractor to provide a written
statement of payments to each subcontractor no later than 14 days
after the end of each tax month. This statement is often called a
payment statement. The statement must include the information
detailed at
ECH14620.
A contractor who
- fraudulently or negligently
provides incorrect written statements may be liable to a penalty
under S98(2) TMA 1970. The maximum penalty is £3,000.
Wherever a contractor has provided false information on a
payment statement the CIO must
- establish the reasons why false information was provided ( ECH8045).
- where the contractor has purposely constructed false pay statements to take money from the business or
- where the contractor and subcontractor have colluded in the use of false pay statements to generate repayments or take money out of the business.
Where a penalty is appropriate the CIO must make a submission to
Tax Administration Advice
Where a contractor is also a subcontractor and is registered
for Gross Payment CIOs must consider whether any failure to comply
with CIS is sufficient to warrant a change in tax treatment.
Further guidance is at
- ECH14650 Cancellation of Gross Payment Registration
In cases of doubt or difficulty advice can be sought from TAA (Newcastle)
