CISR44210 | Register and maintain subcontractor: turnover test: prospective receipts test

A company or partnership applying for gross payment status is to be regarded as passing the turnover test where it is able to show evidence of

• relevant payments earned on its own account amounting to at least £30,000

and

• the existence of construction contracts entered into where the aggregate value exceeds £100,000.

This test is specified in SI2005/2045 reg 29(2)(d). It is not open to sole traders.

That a company or partnership is seeking or has secured gross payment status on this basis will generally emerge where

• it, or its representatives, seek guidance about this provision at the time of application

or

• it comes to light in the course of the Post-Acceptance Check that the turnover figure entered on the application form was calculated on this basis.

In either case you should substantiate the turnover figures by

• looking for evidence of actual turnover of the kind described in CISR44050 (Checking gross turnover figures)

• asking for sight of contracts that established the expectation of future turnover at the date of application.

If you find that in the course of a Post-Acceptance Check the applicant is unable to produce acceptable evidence of prospective turnover satisfying this test you should consider:

• cancelling the applicant’s gross payment status (See CISR43610) for guidance about this

• (This content has been withheld because of exemptions in the Freedom of Information Act 2000)