CISR85040 | CIS fraud measures: Section 62B liabilities: Conditions and determination

FA04/S62B applies where the following conditions are met:

• A person files a return containing a CIS deduction and,

• Before filing this return, they knew or should have known that this CIS deduction:
  - had not been deducted, or
  - had deliberately or would deliberately not be paid by the contractor on account of the person's liabilities

S62B can apply to any person who makes a return containing an amount suffered as a CIS deduction (a CIS credit) used to offset other tax liabilities or generate a repayment. This could be in an income tax self-assessment or an employer payment summary (EPS).

Where these conditions are met, an officer of HMRC may determine that the person making the return is liable to pay an amount equal to the CIS credit claimed.

HMRC can serve the determination under Reg 13A of the Income Tax (Construction Industry Scheme) Regulations 2005 (see CISR85110).

For more information on the key principles for ‘knew or should have known see CISR85060 and what we mean by ‘knew or should have known’ in this context see CISR85050.

If the above conditions are met, HMRC can also:

• Charge the person a penalty (CISR85120)

• If the person is a corporate body or an unincorporated association potentially transfer the penalty to an officer (CISR85150)

• Immediately cancel gross payment status (CISR85210)

FA04/S62B should not be applied where the CIS credit has been removed under SI2005/2045 Part 4A or by an enquiry or correction of the person’s income tax self-assessment return.