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HMRC internal manual

Construction Industry Scheme Reform Manual

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HM Revenue & Customs
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Register and maintain subcontractor: Registration for CIS - problem cases

CISR42600 Action guide contents
   

 

You will occasionally come across cases where it is not possible to register the subcontractor for CIS even though the parent system (such as Self-Assessment) shows a record that is open already in existence. These cases can fall into the following categories and the action to be taken for each is as set out in the Action guide at CISR42750, these actions should be taken by the CIS Centre at Newry for all cases identified.

Bankruptcy cases

Where a sole trader has been made bankrupt and they are continuing to trade, a new Self Assessment (SA) record will be required (See SAM106000). Occasionally, the new Unique Taxpayer Reference (UTR) for the subcontractor will not be recognised on the Citizens Identification Framework (CID) and this will prevent registration for CIS. This will mean that if the contractor tries to verify the subcontractor using the new UTR they will be asked to apply the ‘unmatched’ rate of deduction of 30%.

Dormant cases

Where the subcontractor telephones one of the CIS Contact Centres to register for CIS, but the SA Record is ‘Dormant’ perhaps because the subcontractor has recently recommenced self-employment after a period working on PAYE, or following a period of unemployment.

Written requests to register for CIS

Where an individual or partner subcontractor makes a written request by letter to register for CIS and this is received at the CIS Centre Newry. The CIS Centre Newry will issue the applicant with the necessary forms CWF1/SA400/SA401/SA402 and CIS301 / CIS302 / CIS304 (depending upon whether they wish to apply for Net or Gross payment status, and whether they are a partner or not) to register for SA and CIS. The applicant will be told to send these to the CIS Registration team Longbenton so that they can then be set up for SA / CIS and for Class 2 NICs.

Other Registration problems

If you come across any other Registration problems where it is not possible to register the subcontractor for CIS, even though the parent record is already in existence and it is open, you should take the action as described under ‘Bankruptcy cases’ within CISR42750.

Note: under no circumstances should the customer have deductions made at 30% by their contractor(s) for any length of time where deductions at either 20% or gross payment status are applicable for the subcontractor.