CISR16110 - The Scheme: primary legislation: section 66

This section sets out the circumstances in which a registration for gross payment may be cancelled.

Where cancellation of gross payment status under FA04/S66 (1) takes place, it will be effective from the end of the period prescribed in regulations: FA04/S66(2)

The Board may cancel gross payment status where:

  • a registered person would fail to meet the requirements if applying at that time: FA04/S66 (1)(a)
  • an incorrect return or incorrect information is provided (whether as a contractor or subcontractor) in connection with any obligations under the scheme: FA04/S66 (1)(b), or
  • there is a failure to comply with any obligations arising under, or in connection with any provision of the scheme: FA04/S66 (1)(c)

The registration may be cancelled with immediate effect: FA04/S66 (4) where the Board has reasonable grounds to suspect that a subcontractor registered for gross payment status:

  • using false information: FA04/S66 (3)(a)
  • has fraudulently made an incorrect return or has fraudulently provided incorrect information (whether as a contractor or subcontractor) in connection with a CIS, PAYE, ITSA, CTSA or VAT obligation: FA04/S66 (3)(b), or
  • knowingly failed to comply with an obligation arising under, or in connection with the provision of the scheme: FA04/S66 (3)(c)

On cancelling a registration for gross payment under this section the Board must without delay, notify the subcontractor giving the reasons for cancellation: FA04/S66 (5).

Where cancellation of gross payment status is determined under FA04/S66 (1), the subcontractor must be registered for payment under deduction: FA04/S66 (6).

Where a subcontractor's gross payment status is cancelled under FA04/S66 (3), the Board can use its own judgement as to whether registration for payment under deduction is appropriate: FA04/S66 (7).

If a subcontractor's gross payment status is cancelled in line with sub-sections (2) and (4) of this section and FA04/S67 (5), they cannot re-apply for gross payment status within one year of the cancellation taking effect: FA04/S66 (8).

FA04/S66 (9) allows 'a prescribed period' to be defined in regulations. See Regulation 26, SI2005/2045.