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| CISR44600 | Action guide contents | |—————————————————————————————————–|———————–|

Under SI2005/2045 reg 31, HMRC can treat a sole trader, partnership or company assatisfying the turnover test if the applicant meets the following conditions

• the applicant’s business does not mainly consist of carrying out construction operations
• in the 12 months preceding the date of application the applicant’s total turnover exceeded the relevant turnover threshold for that class of business
• in the year following the application, the applicant is likely to receive relevant payments in connection with construction operations which are incidental to the main business of the applicant.

»Ê¹ÚÌåÓýapp intention of this provision is to assist substantial businesses outside themainstream of the construction industry whose contracts are occasionally or incidentallyaffected by CIS. This might happen, for instance, to a manufacturer and supplier ofindustrial plant. If this business occasionally arranges for the installation of itsproducts, these ‘supply and fixâ€� contracts may be subject to CIS. »Ê¹ÚÌåÓýapp overall commercialturnover of the business may far exceed the level required to satisfy the Standard orAlternative turnover tests but because its ‘constructionâ€� turnover is limited, it may failthose tests. This provision provides a basis for such businesses to satisfy the turnovertest.

In considering an application on this basis you should satisfy yourself that

• the applicant’s business is outside the mainstream construction industry
• its general commercial turnover exceeds the net turnover threshold applicable to that business if it were within the mainstream construction industry
• there is evidence that the applicant has been caught by CIS in the past, or the applicant provides evidence of a current commitment some aspect of which is within the scope of CIS