Posted: June 27, 2018
A recent Supreme Court case (JP Whitter (Water Well Engineers) Ltd v HMRC) has upheld the right of HMRC to remove Gross Payment Status from sub-contractors under the CIS scheme.
Gross Payment Status allows sub-contractors to be paid without the deduction of tax – which can give a significant cash flow benefit. The rules regarding mean that Gross Payment Status is only available to sub-contractors with good tax compliance records – and can be withdrawn if compliance failures arise in future.
The recent case involved Gross Payment Status being withdrawn due to late payments of PAYE. The case eventually reached the Supreme Court where the judgement supported the right of HMRC to withdraw Gross Payment Status.