CISR16240 | The Scheme: primary legislation: schedule 11: part 2

PART 2: Conditions to be satisfied by firms

Para 5:

Where an individual or company wishes to apply to be registered for gross payment status as a partner in a firm, the following conditions must be met.

Para 6:

Applicants must provide evidence, in accordance with Board regulations, to show that the firm's business is carried on in the United Kingdom; that it carries out construction operations itself or arranges for others to carry out construction operations, and that the business is largely conducted through a bank account. See SI2005/2045 reg 27.

Para 7:

1. Partners must provide evidence, as prescribed in regulations, to show that they expect the firm to receive, in the year following application, relevant payments totalling not less than the multiple turnover threshold or the amount specified in regulations. 'Relevant payment' has the meaning given in Para 3(2) of Part I to this Schedule. See SI2005/2045 reg 28(2) and 29.

2. 'Multiple turnover' threshold means the amount obtained by multiplying the number of individual partners in a firm or company by the minimum turnover set out in Para. 3(1) of Part I to this Schedule

3. Where the number of partners in a firm has fluctuated over a period of time, regulations may be made allowing the Board to determine the number of partners to be taken into account for the purposes of the test. See SI2005/2045 reg 30.

4. The Board may make regulations that, in certain circumstances, allow firms that do not meet the conditions at (1) to be treated as having met the turnover test. See SI2005/2045 reg 31.

Para 8:

1. Unless covered by sub-sections (2) and (3) below, during the qualifying period the applicant must have met all requests for information and complied with the following tax obligations to:

   • pay amounts required to be deducted under section 61

   • submit CIS returns

   • pay amounts required to be deducted under PAYE regulations

   • submit a Self Assessment return

   • account for and pay VAT as required by or under the VAT Act 1994

2. A firm can be treated as meeting the compliance obligation in respect of any partner where that partner's failures are of kind set out in regulations made by the Board. See SI2005/2045 reg 32

3. A partner can be regarded as satisfying the conditions in (1) if there is a reasonable excuse for non-compliance and the partner complied with the obligation once the reasonable excuse had ended without unreasonable delay.

4. There must be reason to expect that partners in the firm will continuously comply with the obligations and requests set out in (1).

5. This paragraph stipulates that not only must all partners in the firm have met all their tax obligations in full but must also have done so on time.

Para 8A:

The compliance test is treated as satisfied by the firm if, at the time of the application one or more of the partners already holds gross payment status and that partner or those partners together have a right to a share of at least half of the assets, or at least half of the income of the firm. However, if the firm were to gain gross payment status in this way, the partner who already holds gross payment status cannot have been also granted it in this way or in the equivalent way for companies.