CISR83020 - Compliance: Regulation 9(5) directions: Direction under ‘Condition A’ at Regulation 9(3)
Source: gov.uk (2025-09-10)


CISR83600 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr83600)

Action guide contents

Legislation

SI2005/2045 reg 9(5) says that an officer of Revenue and Customs may direct that a contractor is not liable to pay the excess to the Commissioners for His Majesty’s Revenue and Customs.

Before making the direction, the officer must be satisfied that ‘Condition A’ at Regulation 9(3) is fulfilled, this is that
- the contractor took reasonable care in the operation of the deduction scheme, and either
- the under-deduction or failure to make a deduction was an error made in good faith, or
- despite taking reasonable care the contractor was led to the genuine belief that the law did not require a deduction to be made from the payment or the part of the payment in question.
The purpose of this provision is to give HMRC the discretion to take into account mitigating factors which might excuse a contractor's failure to operate the Scheme correctly.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Simultaneous representations for a direction under Regulation 9(5) quoting both ‘Condition A’ - Regulation 9(3) and ‘Condition B’ - Regulation 9(4)

Contractors may make representations for relief under both provisions of Regulation 9 at the same time. In this case the officer authorised to act as an Officer of Revenue and Customs, should consider the case initially.

If the officer is satisfied by the evidence supporting ‘Condition A’ at Regulation 9(3) they will make a decision in the contractor's favour, and a Regulation 9(5) direction may be made. In this case there will be no need to pursue the question of whether ‘Condition B’ at Regulation 9(4) (see CISR83050 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr83050)) is also satisfied.

Where the officer considers ‘Condition A’ at Regulation 9(3) is not satisfied, they will consider whether ‘Condition B’ at Regulation 9(4) (see CISR83050 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr83050)) is satisfied. If it is then a Regulation 9(5) direction may be made. Where the tax is fully relieved under ‘Condition B’ at Regulation 9(4) a refusal notice under Regulation 9(6) is not required.

Where the tax is partially relieved under ‘Condition B’ at Regulation 9(4) and the officer considers ‘Condition A’ at Regulation 9(3) is not satisfied, a refusal notice under Regulation 9(6) should only be issued for the outstanding tax not relieved by ‘Condition B’.

Appeals

There is a provision for a contractor to appeal under Regulation 9(7) against a refusal to make a direction under Regulation 9(5) ‘Condition A’ only. The appeal should be made in writing to HM Revenue & Customs within 30 days of the refusal notice specifying the grounds for the appeal.

Note: Guidance on the co-ordination of requests for Regulation 9(5) directions and Regulation 13(2) determinations can be found at CISR83040 (https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr83040).