CISR43690 - Register and maintain subcontractor: gross payment or payment under deduction: finalise incomplete tax treatment - Partnerships
| CISR Reference | Topic |
|---|---|
| CISR43000 | Information contents |
This action guide describes how to deal with a case where the system has been unable to complete the Tax Treatment Qualification Test for a partnership. The system will record a result of 鈥業ncomplete鈥� and will provide specific reasons for the automated test not being completed.
Before using this action guide users must read CISR43070 and familiarise themselves with the information panel on TTQT. Where the registered partner(s) currently holds gross payment status which is being removed under FA04/s66(1) you must also firstly consider whether each 鈥榝ailing鈥� partner has a 鈥榬easonable excuse鈥� for the failures identified (see the guidance at CISR49030).
Where you are to finalise the 鈥業ncomplete鈥� or 鈥榰nconfirmed鈥� TTQT result, follow the guidance below;
- From the CIS Main menu select the type of Registration for which you wish to finalise the TTQT. For example, where the subcontractor acts both as a partner in a partnership and as a sole trader select the box alongside one of these and then the 鈥楳anage TTQT鈥� function.
- This will now take you to the 鈥楾ax Treatment Details鈥� window. Under the heading Tax Treatment Qualification Test History CISR will show you the results of where the TTQT is incomplete. Then select the [Finalise] button.
- The TTQT Summary window will now display showing you a list of all the test participants with incomplete results. This window also gives you the option of adding a participant where for example, a new partner has joined a partnership but the new partner has not yet been tested. Where this is necessary select the [Add Participant] button and enter details of the new partner as required.
In order to manually complete a TTQT it is necessary to first make the incomplete reason 鈥業nactive鈥�.
No non-registering partners found
Where TTQT has been unable to locate the SA records of any non-registering partners you will need to go to [View Customer] and select [Partner details]. This will provide you with the names and UTRs for all partners within the partnership.
- Make a note of each partner鈥檚 UTR.
- Go to [SA View Statements].
- Input partner鈥檚 UTR.
- Select [View Statement] button.
The latest statement will then be displayed. You need to look at all liabilities that were due within the last 12 months so you may need to look at more than one statement. Do not consider any liabilities that fall outside of the 12-month qualifying period. You should make a note of the date the liability became due and the date the payment was made.
Use the table below to establish the result.
| Self Assessment Payment | Result |
|---|---|
| All SA payments settled on time | Pass |
| 1 SA tax payment paid less than 28 days late | Pass |
| 1 SA tax payment paid more than 28 days late | Fail |
| 2 SA tax payments paid less than 28 days late | Fail |
| 1 SA payment unpaid (more than 28 days late) | Fail |
| No SA payments due | Pass |
| SA non tax payments settled on time | Pass |
| 1 or more SA non-tax payments paid late | Fail |
Where CIS or SA shows that only one partner is registered under the partnership, you will need to investigate why this is, and obtain all the details of the other partners in the business in order that records may be set up within SA that will then flow across and create a CIS record for those partners.
Liability information for scheme not found
Where the subcontractor employs workers it is necessary to check that liabilities have been met in respect of Non-CIS schemes.
- From [CIS Main Menu] make a note of all schemes registered to the subcontractor
- You will need to check that all liabilities have been met by examining the data held on BROCS (for months up to 05/04/2013) and ETMP (for months from 06/04/2013).
Use the table below to establish the test result
| Employer Liabilities | Result |
|---|---|
| No employer liabilities due | Pass |
| Employer tax liabilities settled on time | Pass |
| 1 or more employer tax liabilities paid more than 14 days late | Fail |
| 3 (or less) employer tax liabilities paid less than 14 days late | Pass |
| 1 employer tax liability unpaid | Fail |
| 4 or more employer tax liabilities less than 14 days late | Fail |
| P35 and P14s due and not received (for years up to and including 2012/13 only) | Fail |
| No P35 and P14s due (for years up to and including 2012/13 only) | Pass |
| P35 and P14s due and received on time (for years up to and including 2012/13 only) | Pass |
| Class 1A return due and not received | Fail |
| Class 1A due and received on time | Pass |
| No Class 1A return due | Pass |
Voluntary Arrangement in place
- Follow the guidance at CISR46130
Participant under enquiry
- Obtain participant鈥檚 UTR from 鈥業ncomplete TTQT Summary Screen鈥�.
- From [SA Case Summary] Select [Compliance]. This will take you to 鈥榁iew Compliance Summary鈥�.
- Select the relevant year that is under enquiry.
- Select [View].
This will now display the name of the Compliance Caseworker dealing with the enquiry. Contact the Enquiry Caseworker to obtain details of the nature of the enquiry and the possible effect it has on TTQT. Refer any cases of difficulty to a Higher Officer/Senior Officer.
Non-standard partnership
A Non-standard partnership is a partnership where one partner is not an individual.
- Go to [View Customer]
- Select [Partner Details]
This will provide you with details of all partners within the partnership; make a note of all partners and their reference numbers. You should then carry out a manual TTQT (see CISR43030) using the SA or COTAX UTR for each of the partners within the business.
Updating TTQT Information
Once you have completed all the required checks you need to update the system and record your result.
TTQT Result
The results from a TTQT can be 鈥楶ass, 鈥楩ail鈥� or 鈥業ncomplete鈥�. Any reason classed as 鈥業ncomplete鈥� needs to be manually checked and the outcome recorded before TTQT can be completed. All reasons with an 鈥楢ctive鈥� status will be automatically printed onto the letter issued to the registered partner (CIS308), the exception to this is where the failure(s) relates to a partner other than the registered partner, before these failures can be included on the failure notice (CIS308) you must obtain the failing partners authority to disclose this information to the registered partner on form CIS324.
A TTQT type of 鈥業ncomplete鈥� occurs when the system has been unable to locate the information it needs to complete the check. These cases are referred for manual action to complete checking process.
To record your result
- Select [Finalise TTQT]
- From the 鈥楶articipant Summary鈥� window select the result reason that you have checked. The result will show as 鈥業ncomplete鈥� and the status will be 鈥楢ctive鈥�. You will need to make the status 鈥業nactive鈥�, to do this go to [Inactivate Reason] this will then change the active status from 鈥榊es鈥� to 鈥楴o鈥�.
Where the manual checks pass the test requirements
- Go to [New Reason]
- This will take you to the 鈥楢dd Reason鈥� window.
- Select 鈥楶ass Reason鈥� and go to the drop down box.
- Select relevant reason from the list presented.
- Select [OK]
This will take you to the 鈥楶articipant Summary鈥� and will record the reason and show the 鈥楾ype鈥� as 鈥楶ass鈥�. The status will be 鈥楢ctive鈥�.
When you are sure that all the information is correct select [Confirm Result]. The status of the result will change to 鈥楥onfirmed鈥�.
Where the manual checks fail the test requirements
- Go to [New Reason]
- This will take you to the 鈥楢dd Reason鈥� window.
- Select 鈥楩ail Reason鈥� and go to the drop down box.
- Select relevant reason from the list presented.
- Select [OK]
This will return you to the 鈥楶articipant Summary鈥� and will record the reason you have entered and show the 鈥楾ype鈥� as 鈥楩ail鈥�. The status will be 鈥楢ctive鈥�.
When you are sure that all the information entered is correct select [Confirm Result]. The status of the result will change to 鈥楥onfirmed鈥�.
Where the application is for initial CIS registration the system will issue form CIS313 to the registered partner(s() where the result is a [Pass], and form CIS316A will be issued to the various contractors that have paid the partnership within the last 2 years advising them of the registered partner(s) new payment status.
Where the application is for initial CIS registration and the confirmed result is a [Fail] then a CIS308 will be issued to the registered partner(s) outlining the reasons for failure, this will outline the failure(s) of the partnership and / or registered partner only, but will not include the failures of other partners unless their authority to disclose this information has been received on form CIS324, if you have already received this you will be able to add these failures as a new failure reason before finalising the TTQT (see above).
Nothing will then be issued to the contractors if the registered partner(s) is already on net payment status. However, if the registered partner(s) is currently on gross payment status then the CIS316A will not be issued to the various contractors until 55 days after the TTQT is finalised, to allow time for any appeal from the partnership to be made. The contractors will be told by this notice that the new payment status should be applied from a date which will be 90 days after the TTQT was confirmed.
Update Test
If you have to terminate the TTQT check before it is fully complete you can save any checks done by selecting the [Update Test] button. This will ensure that work is saved and will enable you to complete the remainder of the test at a later stage.