CISR44100 - Register and maintain subcontractor: turnover test: the threshold explained
| CISR44600 | Action guide contents | |—————————————————————————————————–|———————–|
The threshold is the expression used for the level of net construction turnover an applicant for a gross status must demonstrate to pass the turnover test. It varies according to the type of applicant and the test being applied. If the applicant cannot show sufficient turnover as detailed below, they will not pass the“turnover test”, the applicant is not able to apply on a“proportional” basis (in other words there is turnover of £12,000 shown but ina 4 month period only). The current thresholds are shown below.
Sole traders
Standard test - £30,000 in the 12 month period preceding the date of application.
Partnerships
Standard test - £30,000 multiplied by the maximum number of the partnership’s participants at any one time in the 12 months preceding the application date. This is known as the ‘multiple partnership turnover threshold’.
For the purposes of this test, participants are:
- partners who are individuals
and
- where a member of the partnership is a company, the number of ‘relevant persons’ relating to that company
Alternative test - £100,000 in the 12 month period preceding the date of application.
Companies
Standard test - £30,000 multiplied by the maximum number of the company’s relevant persons at any one time in the 12 months preceding the application date. This is known as the ‘multiple company turnover threshold’. In this case relevant persons are:
- directors
and
- where the company is a ‘close’ company, its beneficial shareholders
Alternative test - £100,000 in the 12 month period preceding the date of application.
Setting the thresholds
The provisions specifying these thresholds are as follows
- ‘individual turnover threshold’ - SI2005/2045 reg 28(1)
- ‘multiple turnover threshold’ for partnerships – FA04/SCH11/PARA7(2)
- ‘alternative partnership turnover threshold’ - SI2005/2045 reg 28(2)
- ‘company multiple turnover threshold’ – FA04/SCH11/PARA11(2)(a)
- ‘alternative company turnover threshold’ - SI2005/2045 reg 28(3)