The Income Tax (Sub-Contractors in the Construction Industry) (Amendment) Regulations 1990

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Income Tax (Sub-Contractors in the Construction Industry) Regulations 1975 (“the 1975 Regulations”) in various respects. The Regulations come into force for the purposes of regulations 3 and 4 on 7th-February 1990, for the purposes of regulations 5 to 14 inclusive on 6th April 1990 and for all other purposes on 1st October 1990.

Regulation 1 provides for citation and commencement and regulation 2 contains definitions.

Regulation 3 inserts a new Regulation 4B in the 1975 Regulations. This enables contractors to elect to set up separate deduction schemes for different groups of subcontractors. An election will be effective for the tax year after that in which it is made and for subsequent years unless revoked.

Regulation 4 makes an amendment to Regulation 12A of the 1975 Regulations (additional to that made by the Income Tax (Sub-Contractors in the Construction Industry) (Amendment) Regulations 1989 (S.I. 1989/1290)) consequent on the coming into force of section 178 of the Finance Act 1989 (c. 26) and the Taxes (Interest Rate) Regulations 1989, which together provide a mechanism for the calculation of the prescribed interest rate referred to in that Regulation.

Regulation 5 substitutes a new Regulation 8 of the 1975 Regulations in which the requirement for a contractor to provide the Collector with the information necessary to calculate the contractor’s liability is replaced by a requirement to notify total liability for a specified period.

Regulation 6 makes an amendment to Regulation 8A of the 1975 Regulations which is consequent on the amendments to Regulation 10 of those Regulations made by regulation 7.

Regulation 7 amends Regulation 10 of the 1975 Regulations by—

(a) extending the date for submission of the contractor’s end of year return from 19th April to 19th May in each year;

(b) providing that a single return is to be made in respect of all sub-contractors to whom payments have been made under the deduction scheme, that the statement declaration and certificate accompanying the return are part of it and that the certificate is to show the total amount deductible in the case of each sub-contractor and the total of all such amounts; and

(c) applying the penalty provisions of section 98A of the Taxes Management Act 1970 to late and incorrect contractors' returns.

Regulation 8 amends Regulation 15 of the 1975 Regulations by removing the requirement for the distinctive number on a sub-contractor’s tax certificate to be assigned by the Inspector issuing it.

Regulation 9 amends Regulation 16 of the 1975 Regulations by altering the requirement that a certificate in form 714I, 714S or 714P be signed in the presence of the Inspector issuing it to a requirement that it be signed immediately on receipt.

Regulation 10 amends Regulation 18 of the 1975 Regulations by removing the requirement that an application for renewal of a certificate be made to an Inspector.

Regulations 11, 12 and 13 make amendments to Regulations 20, 22 and 23 of the 1975 Regulations consequent on the amendments made by regulations 8 and 9.

Regulation 14 substitutes a new Regulation 25 of the 1975 Regulations providing for the submission of vouchers to the Commissioners of Inland Revenue within 14 days after the end of every income tax month.

Regulation 15 amends Regulation 15 of the 1975 Regulations by providing for the issue of a sub-contractor’s tax certificate showing a date from which it is valid in addition to a date of expiry and regulations 16 and 17 make amendments to the 1975 Regulations consequent on the introduction of the new type of certificate.

Regulations 18 and 19 provide for the replacement of the existing designs of the forms 714I, 714S, 714P and 714C by the new designs set out in the Schedule to the Regulations.