CISR17040 | The Scheme: secondary legislation: regulation 3

This regulation sets out the arrangements under which a contractor can elect to operate separate schemes for each part of the business. This regulation corresponds with facilities provided under SI1993/744 reg 4.

A contractor can elect to be treated as a different contractor in relation to different groups of subcontractors: SI2005/2045 reg 3(1).

Where a contractor makes such an election, the regulations will have the effect of treating the contractor as a different contractor for each group of subcontractors, each group as constituting all the subcontractors paid by the contractor in respect of construction operations and where a subcontractor is allocated to more than one group, they will be treated as if they had more than one contractor for whom they receive payments relating to construction operations: SI2005/2045 reg 3(2).

While a multiple contractor election continues, any new subcontractor must be allocated to at least one of the subcontractor groups: SI2005/2045 reg 3(3).

HMRC must be notified of a multiple contractor election before the beginning of the tax month immediately preceding the tax month for which the election is to have effect. The contractor must also provide HMRC with confirmation of the tax month for which the election is to have effect, information identifying the different groups of subcontractors and confirming that no payments for construction operations are made outside of these groups: SI2005/2045 reg3(4) and (5).

A multiple contractor election continues to have effect until the contractor notifies HMRC that it is to be revoked: SI2005/2045 reg 3(8).

A revocation notice must be provided by the contractor before the beginning of the tax month for which the election is to be revoked. Revoking an election does not prevent the making of a new election for that or a later tax month: SI2005/2045 reg 3(9).

An election that has not yet come into effect can be revoked at any time before the beginning of the tax month in which it was to take effect: SI2005/2045 reg 3(10).

ENABLING PROVISION – FA04/S71 (2)