INCOME TAX Citation and commencement 1 These Regulations may be cited as the Income Tax (Sub-Contractors in the Construction Industry) Regulations 1988 and shall come into force on 19th April 1988. Interpretation 2 In these Regulations “the Principal Regulations ” means the Income Tax (Sub-Contractors in the Construction Industry) Regulations 1975 . Amendments to the Principal Regulations 3 In regulation 7 of the Principal Regulations there shall be added— 4 If the amount which a contractor is liable to pay to the Collector under paragraph (1) of this Regulation exceeds the amount, if any, actually deducted by him from payments made during the relevant month but the Inspector (whether or not an assessment under Regulation 12 has been made) is satisfied that the person to whom the contractor made such payments either— a was not chargeable to income tax or corporation tax in respect of those payments, or b has made a return of his income or profits in accordance with section 8 or section 11 of the Taxes Management Act 1970 , in computing which income or profits those payments were taken into account, and paid the income tax and Class 4 contributions due or corporation tax due in respect of such income or profits, then the Inspector shall, if the contractor so requests, direct that the contractor shall not be liable to pay the said excess (or any interest in respect of it) to the Collector. 5 If a contractor is aggrieved by the failure of a Collector to make a direction under paragraph (3) of this Regulation, he may, by notice in writing to the Collector within thirty days after the date of a notice given after 19th April 1988 of a refusal by the Collector to make such a direction, appeal to the General Commissioners against such refusal. . 4 1 In regulation 11(1) of the Principal Regulations for the words “at the contractor’s premises” there shall be substituted— “at such time as that officer may reasonably require at the prescribed place”. 2 In regulation 11(2) of the Principal Regulations for the words “at the sub-contractor’s premises” there shall be substituted— “at such time as that officer may reasonably require at the prescribed place”. 3 After regulation 11(2) of the Principal Regulations there shall be inserted— 2A In paragraphs (1) and (2) of this Regulation “the prescribed place” means— a such place in the United Kingdom as the contractor or the person such as is mentioned in paragraph (2) (in this paragraph called “the sub-contractor”) and the authorised officer may agree upon; or b in default of such agreement, the place in the United Kingdom at which the documents and records mentioned in paragraphs (1) and (2) of this Regulation are normally kept; or c in default of such agreement and if there is no such place as is referred to in sub-paragraph (b) above, the contractor’s or the sub-contractor’s principal place of business in the United Kingdom. 2B The authorised officer may— a take copies of, or make extracts from, any document produced to him for inspection in accordance with paragraph (1) or paragraph (2) of this Regulation; b if it appears to him to be necessary to do so, at a reasonable time and for a reasonable period, remove any document so produced, and, if he does so, shall provide a receipt for any documents so removed; and where a lien is claimed on a document produced in accordance with paragraph (1) or paragraph (2) of this Regulation the removal of the document under this sub-paragraph shall not be regarded as breaking the lien; and where a document removed in accordance with sub-paragraph (b) of this paragraph is reasonably required for the proper conduct of a business the authorised officer shall, within 7 days, provide a copy of the document, free of charge, to the person by whom it was produced or caused to be produced. . 5 After regulation 12 of the Principal Regulations there shall be inserted— 12A 1 Where an amount is charged by an assessment made by the Inspector under Regulation 12 at any time after 19th April 1988 and becomes due and payable, the amount so due and payable shall carry interest at the prescribed rate from the reckonable date until payment. 2 Subject to paragraph (3) of this Regulation, “reckonable date” in this Regulation means the 14th day after the end of the year to which the assessment relates, and for the purposes of this Regulation, where the assessment is made in respect of one or more income tax months, that assessment shall relate to the year of which that month or months forms or form part. 3 Where, at any time after 19th April 1988, the Inspector makes an assessment such as is mentioned in paragraph (1) of this Regulation, and that assessment relates to a year earlier than the year ended on 5th April 1988, then the amount due and payable under the assessment shall carry interest at the prescribed rate from 19th April 1988 until payment and in those circumstances that date shall be the reckonable date. 4 In this Regulation “the prescribed rate” has the same meaning as in section 89 of the Taxes Management Act 1970 as from time to time increased or decreased by the Treasury in accordance with that section for the purposes of section 86 of that Act; any such increase or decrease shall apply to interest for periods beginning on or after the date when the order is expressed to come into force, whether or not interest runs from before that date. 5 An amount due and payable under an assessment such as is mentioned in paragraph (1) of this Regulation shall carry interest from the reckonable date even if that date is a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882 . 6 Interest payable under this Regulation shall be recoverable as if it were an amount charged by an assessment made under Regulation 12. . 6 For regulation 26 of the Principal Regulations there shall be substituted— 26 1 A contractor, whenever called upon to do so by an authorised officer of the Commissioners of Inland Revenue, shall produce for inspection the records referred to in Regulation 24 at such time as that officer may reasonably require at the prescribed place. 2 In paragraph (1) of this Regulation “the prescribed place” means— a such place in the United Kingdom as the contractor and the authorised officer may agree upon; or b in default of such agreement, the place in the United Kingdom at which the records are normally kept; or c in default of such agreement and if there is no such place as is referred to in sub-paragraph (b) above, the contractor’s principal place of business in the United Kingdom.ormally kept; or c in default of such agreement and if there is no such place as is referred to in sub-paragraph (b) above, the contractor’s principal place of business in the United Kingdom. 3 The authorised officer may— a take copies of, or make extracts from, any document produced to him for inspection in accordance with paragraph (1) of this Regulation; b if it appears to him to be necessary to do so, at a reasonable time and for a reasonable period, remove any document so produced, and, if he does so, shall provide a receipt for any documents so removed; and where a lien is claimed on a document produced in accordance with paragraph (1) of this Regulation the removal of the document under this sub-paragraph shall not be regarded as breaking the lien; and where a document removed in accordance with sub-paragraph (b) of this paragraph is reasonably required for the proper conduct of a business the authorised officer shall, within 7 days, provide a copy of the document, free of charge, to the person by whom it was produced or caused to be produced. . Information as to changes in control of close companies 7 1 Where— a a company is a close company and is a private company limited by shares; and b either the company holds a certificate in force under section 70 of the Finance (No. 2) Act 1975 or has applied for such a certificate; and c there is a change in the control of that company by reason of an issue or transfer of shares in the company to a person who was not immediately before such issue or transfer a shareholder in that company; the company shall, within 30 days of such issue or of receiving information as to the transfer, furnish in writing to the Inspector the name and address of the person to whom such shares were issued or transferred. 2 In this regulation “control” has the same meaning as in section 534 of the Income and Corporation Taxes Act 1970 . T. J. Painter A. B. Fallows Two of the Commissioners of Inland Revenue 29th March 1988