The Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 1991

These Regulations may be cited as the Income Tax (Sub-contractors in the Construction Industry) (Amendment) Regulations 1991 and shall come into force on 19th May 1991.

In these Regulations “the Principal Regulations” means the Income Tax (Sub-contractors in the Construction Industry) Regulations 1975^f1 and “Regulation” means a regulation of those Regulations.

In Regulation 2(1)^f1 after “income tax month” there shall be inserted

• “income tax period”

• “income tax quarter”.

For Regulation 7 there shall be substituted—

“Monthly payment of amounts deducted to Collector

7

Subject to Regulations 7A and 8A(8), the contractor shall pay to the Collector within 14 dats of the end of every income tax month all amounts which he was liable under section 559 of the Income and Corporation Taxes Act 1988 to deduct from payments made by him during that incometax month.

Quarterly payment of amounts deducted to Collector

7A

(1)

Subject to Regulation 8A(8), where the contractor has reasonable grounds for believing that the condition specified in paragraph (2) applies and so chooses, he shall pay to the Collector within 14 days of the end of every income tax quarter all amounts which he was liable under section 559 of the Income and Corporation Taxes Act 1988 to deduct from payments made by him during that income tax quarter.

(2)

The condition specified in this paragraph is that the average monthly total amount to be paid to the Collector under—

(a)

the Income Tax (Employments) Regulations 1973^f1,

(b)

the Social Security Act 1975^f2 and the Social Security (Contributions) Regulations 1979^f3 or, as the case may be, the Social Security (Northern Ireland) Act 1975^f4 and the Social Security (Contributions) Regulations (Northern Ireland) 1979^f5, and

(c)

Regulation 7,

will be less than £400 for income tax months falling within the current year.

Payment of amounts deducted to Collector — further provisions

7B

(1)

The Collector shall, if so requested, give a receipt to the contractor for the total amount paid under Regulation 7 or 7A; but if a receipt is given for a total sum paid at the same time which includes that amount and also tax deducted under the Income Tax (Employments) Regulations 1973, or earnings related contributions, or both, then no seperate receipt for the total amount so paid need be given.

(2)

If the amount specified in Regulation 7 of 7A(1) which a contractor is liable to pay to the Collector exceeds the amount, if any, actually deducted by him from payments made during the relevant income tax period but he satisfies the Collector that he took reasonable care to comply with the provisions of section 559 of the Income and Corporation Taxes Act 1988 and of these Regulations and that either—

(a)

the under-deduction or failure to make a deduction was due to an error made in good faith, or

(b)

in spite of such reasonable care as aforesaid, he had been led to the genuine belief that a payment made by him, which was one to which section 559 of the Income and Corporation Taxes Act 1988 applies, was not or was not wholly such a payment,

then the Collector may direct that the contractor shall not be liable to pay the said excess to the Collector.

(3)

If the amount specified in Regulation 7 or 7A(1) which a contractor is liable to pay to the Collector exceeds the amount, if any, actually deducted by him from payments made during the relevant income tax period but the Inspector (whether or not an assessment under Regulation 12 has been made) is satisfied that the person to whom the contractor made such payments either—

(a)

was not chargeable to income tax or corporation tax in respect of those payments, or

(b)

has made a return of his income or profits in accordance with section 8 or section 11 of the Taxes Management Act 1970^f6, in computing which income or profits those payments were taken into account, and paid the income tax and Class 4 contributions due or corporation tax due in respect of such income or profits,

then the Inspector shall, if the contractor so requests, direct that the contractor shall not be liable to pay the said excess (or any interest in respect of it) to the Collector.

(4)

If a contractor is aggrieved by the failure of a Collector to make a direction under paragraph (2), he may, by notice in writing to the Collector within thirty days after the date of a notice given after 19th April of a refusal by the Collector to make such a direction, appeal to the General Commissioners against such refusal.”

In Regulation 8^f1—

In Regulation 8A^f1—

In Regulation 9^f1—

In Regulation 11^f1 for the words “income tax months” wherever they appear there shall be substituted the words “income tax periods”.

(This note is not part of the Regulations)