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HMRC internal manual

Construction Industry Scheme Reform Manual

From
HM Revenue & Customs
Updated
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The Scheme: miscellaneous: changes in taxpayer type

CISR18600 Action guide contents
   

There are three main types of taxpayer for the purposes of the construction industry scheme; the sole trader, the partnership and the company. CIS subcontractor records are created when a parent SA or COTAX record exists and steps are taken to set up a CIS record. CIS contractor records are created when a parent Employer Business Service (EBS) record holds a ‘PSC’ or ‘XP’ identifier.

Where a taxpayer changes type, there will be changes to the parent SA or COTAX records. Those changes will feed through to the CIS system. Likely changes of type and their implications for the various HMRC systems are described as follows

Sole trader to partnership See A below
   
Partnership to sole trader See B below
Sole trader to company See C below
Partnership to company See D below
Change in the constitution of a partnership See E below

A - Sole trader to partnership

This change may lead to

  • cessation of the sole trader source on the trader’s SA record.
  • any necessary change to the EBS system.
  • creation of a partnership source on the trader’s SA record.
  • creation of a record for the partnership on SA and allocation of a UTR.
  • issue of an application form CIS304 for each partner wishing to register for CIS on request only.

B - Partnership to sole trader

This change may lead to

  • cessation of this partnership source on each of the partners’ SA records.
  • any necessary change to the EBS system.
  • creation of a sole trader source on the SA record for all partners continuing to trade as sole traders.
  • issue of an application form CIS301 / CIS302 for the sole trader

C - Sole trader to company

This change may lead to

  • cessation of the sole trader source on the trader’s SA record.
  • any necessary change to the EBS system.
  • creation of a company record on the COTAX system and allocation of a UTR.
  • issue of an application form CIS305 to the company.

D - Partnership to company

This action may lead to

  • cessation of the partnership source on each of the partners’ SA records.
  • any necessary change to the EBS system.
  • issue of application form CIS305 to the company.

E - Change in the constitution of a partnership

This is not a change in the type of concern, but some of the implications are similar. This action may lead to the

  • need to change the partnership name.
  • issue of an application form CIS304 for any new partner wishing to register for CIS on request only.