The Income Tax (Construction Industry Scheme) Regulations 2005

In-year repayments of provisional excess credit

17.—(1) This regulation applies if—

(a) a sub-contractor is an individual or a firm,

(b) an application is made by that individual or a partner in the firm (“the applicant”) to the Commissioners for Her Majesty’s Revenue and Customs in accordance with paragraph (4),

(c) any income tax and Class 4 contributions due from the applicant, or the sub-contractor, on the applicant’s share of the annual profits or gains arising or accruing from the trade, profession or vocation of the sub-contractor, for any earlier year, have been paid, and

(d) all relevant tax payment vouchers issued to the sub-contractor under regulation 7 of the Income Tax (Sub-contractors in the Construction Industry) Regulations 1993(1) in relation to payments made before the appointed day are produced to the Commissioners for Her Majesty’s Revenue and Customs.

(2) If the Commissioners for Her Majesty’s Revenue and Customs are satisfied by evidence produced by the applicant that A exceeds B, the applicant shall, subject to paragraph (5), be entitled to repayment of the excess by the Commissioners for Her Majesty’s Revenue and Customs.

(3) In paragraph (2)—

• A is the amount of the applicant’s share of the total of sums deducted under section 61 of the Act from contract payments made to the sub-contractor and paid to the Commissioners for Her Majesty’s Revenue and Customs, in so much of the year as has elapsed at the date when the application is made; and

• B is the aggregate of the following amounts—

  (a)

  the income tax and any Class 4 contributions payable (whether or not yet due and payable) by the applicant, on his share of the annual profits or gains arising from the trade, profession or vocation of the sub-contractor which are chargeable to tax for the whole of that year, after deducting any cumulative entitlement of the applicant at the date of the application to an allowance under section 257 or 257A of ICTA(2) (personal allowance and married couple’s allowance);

  (b)

  the income tax and any Class 4 contributions payable (whether or not yet due and payable) by the applicant, on any income arising during so much of the year as has elapsed at the date of the application, from which income tax has not been deducted at source, within the meaning given by section 59B(7) of TMA(3) (payment of income tax and capital gains tax); and

  (c)

  any sum due and payable by the sub-contractor under ICTA or TMA, and, without prejudice to the generality of the foregoing, this includes any sums deducted by the sub-contractor in the capacity of a contractor, under section 61 of the Act.

(4) An application under this regulation must be made to the Commissioners for Her Majesty’s Revenue and Customs containing a declaration that all of the information given in relation to paragraph (3) is correctly stated to the best of the knowledge and belief of the applicant, and where the applicant is a partner in a firm, the form shall be signed by all the partners in the firm who are individuals and, where the partner is a company, by the secretary or a director of the company.

(5) No repayment under this regulation shall be made after the end of the year to which the application relates.

(1)

S.I. 1993/743. Regulation 7 was amended by regulation 7 of S.I. 1998/2622.

(2)

Section 257 and 257A were substituted by section 33 of the Finance Act 1988. Section 257 was amended by section 33(4)(a) and (5)(b) of the Finance Act 1989 (c. 26), paragraph 13 of Schedule 20 and Schedule 41 Part V(10) to the Finance Act 1996 (c. 8), section 29(1) of the Finance Act 2002 (c. 23), article 2(1) of S.I. 2001/3773 and article 2(2) of S.I. 2002/2930. Section 257A was amended by section 33(8) (a) and (9)(b) of the Finance Act 1989 (c. 26), paragraph 14 of Schedule 20 to the Finance Act 1996 (c. 8), section 77 (2) and (7) of the Finance Act 1994 (c. 9), section 30(7) and (11), section 31 and Schedule 20 Part III(3) of the Finance Act 1999 (c. 16), section 60 and Schedule 6 of the Tax Credit Act 2002 (c. 21) and article 2(3) of S.I. 2002/2930.

(3)

Section 57B was inserted by sections 193 and 199(1) and (2)(a) of the Finance Act 1994 and modified by paragraph 31(1) and (3) of Schedule 21 to the Finance Act 1995 (c. 4).