Income and Corporation Taxes Act 1988

561 Exceptions from section 559. U.K.

M1 (1) Subject to the provisions of regulations under F1 . . . section 566(2), a person is excepted from section 559 in relation to payments made under a contract if a certificate under this section has been issued to that person and is in force when the payment is made, but—

(a) where the certificate has been issued to a person who becomes a partner in a firm, that person is not excepted in relation to payments made under contracts under which the firm or, where a person has nominated the firm to receive payments, the person who has nominated the firm is a sub-contractor; and

(b) where a certificate has been issued to a person as a partner in a firm, that person is excepted in relation only to payments made under contracts under which the firm or, where a person has nominated the firm to receive payments, the person who has nominated the firm, is a sub-contractor.

(2) If the Board are satisfied, on the application of an individual or a company, that—

(a) where the application is for the issue of a certificate to an individual (otherwise than as a partner in a firm), he satisfies the conditions set out in section 562;

(b) where the application is for the issue of a certificate to a person as a partner in a firm, that person satisfies the conditions set out in section [F2 562] if he is an individual or, if a company, the conditions set out in section 565 and, in either case, the firm itself satisfies the conditions set out in section 564;

(c) where the application is for the issue of a certificate to a company, the company satisfies the conditions set out in section 565 and, if the Board have given a direction under [F3 subsection (6)] below, each of the persons to whom any of the conditions set out in section 562 applies in accordance with the direction satisfies the conditions which so apply to him,

the Board shall issue to that individual or company a certificate excepting that individual or company (or, in a case falling within paragraph (b) above, that individual or company as a partner in the firm specified in the certificate) from section 559.

(3) References in subsection (2) above to an individual, a company or a firm satisfying conditions set out in section 562, F4 . . . 564 or 565 include, in relation to a condition which may, by virtue of a provision of that section, be treated as being satisfied, references to that individual, company or firm being treated as satisfying that condition.

(4) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Where it appears to the Board, on an application made under subsection (2) above by a company, that the company—

(a) was incorporated on a date within the period of three years ending with the date of the application; or

(b) has not carried on business continuously throughout that period; or

(c) has carried on business continuously throughout that period but the business has not at all times in that period consisted of or included the carrying out of construction operations; or

(d) does not at the date of the application hold a certificate which is then in force under this section;

the Board may direct that the conditions set out in section 562 or such of them as are specified in the direction shall apply to the directors of the company and, if the company is a close company, to the persons who are the beneficial owners of shares in the company or to such of those directors or persons as are so specified as if each of them were an applicant for a certificate under this sectionF6 . . . .

• In this subsection “director” has [F7 the meaning given by section 67 of ITEPA 2003].

(7) Where it appears to the Board that there has been a change in the control of a company holding or applying for a certificate, the Board may make any such direction as is referred to in subsection (6) above.

(8) The Board may at any time cancel a certificate which has been issued to a person and is in force under this section if it appears to them that—

(a) it was issued on information which was false;

(b) if an application for the issue of a certificate under this section to that person were made at that time, the Board would refuse to issue a certificate;

(c) that person has permitted the certificate to be misused; or

(d) in the case of a certificate issued to a company, there has been a change in the control of the company and information with respect to that change has not been furnished in accordance with regulations under section 566(2);

and may by notice require that person to deliver the certificate to the Board within the time specified in the notice.

Section 840 shall apply for the purposes of paragraph (d) above.

(9) A person aggrieved by the refusal of an application for a certificate under this section or the cancellation of such a certificate may, by notice given to the Board within 30 days after the refusal or, as the case may be, cancellation, appeal to the General Commissioners or, if he so elects in the notice, to the Special Commissioners; and the jurisdiction of the Commissioners on such an appeal shall include jurisdiction to review any relevant decision taken by the Board in the exercise of their functions under this section.

(10) If any person, for the purpose of obtaining a certificate under this section—

(a) makes any statement, or furnishes any document, which he knows to be false in a material particular; or

(b) recklessly makes any statement, or furnishes any document, which is false in a material particular,

he shall be liable [F8 to a penalty not exceeding £3,000].

(11) A person to whom a certificate is issued under this section or a voucher is given as required by regulations under section 566(2)(j) [F9 or who is in possession of any form or other document supplied to him by the Board for use in connection with any regulations under this Chapter] shall take all reasonable steps to ensure its safety; and any person who, without lawful authority or lawful excuse—

(a) disposes of any such certificate or voucher or any form supplied by the Board in connection with regulations made by virtue of section 566(2)(e); or

(b) possesses such a certificate, voucher or form or any document purporting to be such a certificate, voucher or form,

shall be liable [F10 to a penalty not exceeding £3,000].

(12) F11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(13) Without prejudice to section 843(3), this section shall come into force on 6th April 1988 to the exclusion of the provisions of section 70 of the Finance (No.2) Act 1975 which are re-enacted in this section, but any offence committed before that date shall not be punishable under this section and neither this subsection nor any other provision of this Act shall prevent any such offence from being punishable as if this Act had not been passed.

Textual Amendments

F1 Words in s. 561(1) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 1, 5 of the repealing Act) by Finance Act 1995 (c. 4), Sch. 29 Pt. 8(21); S.I. 1999/2156, art. 2(a)

F2 Words in s. 561(2)(b) substituted (with effect in accordance with Sch. 27 para. 8(1) of the amending Act) by Finance Act 1995 (c. 4), Sch. 27 para. 3(1); S.I. 1998/2620, art. 3

F3 Words in s. 561(2)(c) substituted (retrospectively) by Finance Act 1994 (c. 9), Sch. 17 para. 5

F4 Words in s. 561(3) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 3, 5 of the repealing Act) by Finance Act 1995 (c. 4), Sch. 29 Pt. 8(21); S.I. 1999/2156, art. 2(a)

F5 S. 561(4)(5) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 1, 5 of the repealing Act) by Finance Act 1995 (c. 4), Sch. 29 Pt. 8(21); S.I. 1999/2156, art. 2(a)

F6 Words in s. 561(6) repealed (with effect in accordance with Sch. 29 Pt. 8(21) Notes 3, 5 of the repealing Act) by Finance Act 1995 (c. 4), Sch. 29 Pt. 8(21); S.I. 1999/2156, art. 2(a)

F7 Words in s. 561(6) substituted (6.4.2003 with effect in accordance with s. 723(1) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), Sch. 6 para. 59 (with Sch. 7)

F8 Words in s. 561(10) substituted (with effect in accordance with Sch, 27 para. 8(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 27 para. 3(2); S.I. 1998/2620, art. 2

F9 Words in s. 561(11) inserted (with effect in accordance with Sch. 27 para. 8(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 27 para. 3(3)(a)

F10 Words in s. 561(11) substituted (with effect in accordance with Sch, 27 para. 8(2) of the amending Act) by Finance Act 1995 (c. 4), Sch. 27 para. 3(3)(b); S.I. 1998/2620, art. 2

F11 S. 561(12) repealed (with effect in accordance with Sch. 27 para. 8(2) of the repealing Act) by Finance Act 1995 (c. 4), Sch. 29 Pt. 8(21), Note 2; S.I. 1998/2620, art. 2

Marginal Citations

M1 Source-1975 (No.2) s.70(1)-(6), (9)-(11), 70A(1), (2), 71(4); 1982 Sch.8 3, 5; 1987 (No.2) s.93