CISR44070 - Register and maintain subcontractor: turnover test: checking number of partners / relevant persons

| CISR44600 | Action guide contents | |—————————————————————————————————–|———————–|

For partnership and company applications using the standard turnover test the individual threshold figure must be multiplied by the number of partners or relevant persons.(‘Relevant persons’ are a company’s directors and, if it is ‘close’ its beneficial shareholders. Relevant persons need to be taken into account where a company is a member of a partnership). See CISR44120 for detailed information about how to calculate the number of ‘Relevant persons’ for various different types of Partnership’s and Companies.

An applicant might attempt to understate the number of persons involved in the business in order to reduce the multiple turnover threshold, you should check the accuracy of numbers supplied as far as possible using HMRC Systems and information on file such as accounts.Examining the partnership’s SA record, for instance, should allow you to compare known partners with those named on the form CIS304. Where a company is a member, you will need to refer to the Corporation Tax file to determine the number of its directors,whether it is ‘close’ and, if so, how many shareholders need to be taken into account.

Overall, you should be looking to check that the number of partners/relevant persons forthe 12 month test period preceding the application date agrees with numbers shown in any SA or COTAX records for the period. Note that the critical number is the maximum number of partners/relevant persons at any one time in the qualifying period.

Where there is a discrepancy you should seek an explanation from the applicant. If this is unsatisfactory and you conclude that the number of partners/relevant persons was understated to reduce the qualifying threshold, 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)