This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: construction industry scheme: CIS - until 5 April 2007 - open year inaccuracies

An open year is any tax year for which form CIS36 (or SC35) has not been submitted.

Where a contractor failed to make deductions (see COG910130) from payments to a Registration Card holder who is an individual the caseworker should

  • firstly consider the correct status of the worker. COG907500.

If the caseworker considers that the worker was an employee the caseworker should

  • follow the guidance at COG907540.

Where the caseworker is satisfied that the subcontractor was self-employed the caseworker should

  • advise the contractor of the correct procedure for the future
  • advise the contractor

    • not to issue a retrospective CIS25 voucher for the unpaid deductions
  • calculate the deductions underpaid
  • recover the underpayment by way of a Class 6 settlement and
  • consider penalties for failure to make a return. (COG914000)


The contractor should not complete a retrospective CIS25 as this will put the subcontractor in a position to claim credit for deductions he has not actually suffered. However if the subcontractor makes good the deductions the caseworker should follow the guidance at COG909230.

If the contractor refuses to settle the arrears by way of a Class 6 settlement the caseworker should

  • consider raising a Regulation 13 determination for the amount due.

When calculating current year liability the caseworker should

  • follow the guidance at COG906590 suitably adapted for CIS.