Register and maintain subcontractor: the registration process: register unincorporated body for gross payment
This action guide explains how to process an application for Gross Payment registration from an unincorporated body made on form CIS305
To register an unincorporated body subcontractor for gross payment firstly carry out only Steps 1) to 10) of the Action Guide at CISR42700 – ‘Register Unincorporated body for Payment under Deduction’
In the ‘Trading Details’ window
* Select the [Apply for Gross] buttonThis takes you to the ‘Turnover Details’ window
- In the ‘Turnover Details’ panel of the ‘Turnover’ window
* Enter the number recorded at Box 22 of the form CIS305 in the ‘Maximum Number of Relevant Persons’ field * Enter the amount recorded at Box 23A of the form CIS305 in the ‘Gross amount of payments’ field * Enter the amount recorded at Box 23B of the form CIS305 in the ‘Cost of materials’ field * Enter the amount recorded at Box 23C of the form CIS305 in the ‘Net Construction Turnover’ fieldNote — The result of the test will be shown as ‘Passed’ or ‘Failed’ alongside ‘Turnover Test Passed’
- In the ‘Bank Account’ panel of the ‘Turnover’ window
* Enter * the account name recorded at Box 24 of the form CIS305 in the ‘Account Name’ field * the Sort Code recorded at Box 25 of the form CIS305 in the ‘Sortcode’ field * the account number recorded at Box 26 of the CIS305 in the ‘Account Number’ field * Select the [Validate] button and the CIS System will show whether the bank account details are ‘Valid’ or ‘Invalid’If you see ‘Valid’ alongside ‘Account Valid’ entry * Go to Step 6)If you see ‘Invalid’ alongside ‘Account Valid’ and the message ‘The bank account is not registered in the UK’ * Go to Step 5)
- Where the bank account details appear to be invalid
* Telephone the applicant to explore the reason for the failureIf the Bank account remains invalid or where the Turnover Test has failed, or both, then you should select [Next] and not the [Cancel Gross] button on this window, you will then be presented with a dialogue box which says “Press OK to cancel the application for gross and remain on net”, select [OK] to confirm the declaration for Payment Under Deduction. The system will then automatically write to the customer (CIS308) advising that they are registered for Payment under Deduction but they have failed the application for gross payment status. The reasons for failure will be detailed on the letter. * Go to Step 8)If you are satisfied that the bank account exists * Select the ‘Override’ checkbox * Select the dropdown arrow alongside the ‘Reason for Override’ field * Select the appropriate description * Go to Step 6)
- If both the Turnover Test was passed and the bank account details are valid
* Select the [Next] button and this takes you to the ‘Employer Obligations’ window * Go to Step 7)
- In the ‘Employer Obligations’ window
* If there is an ‘X’ in the ‘Yes’ box in Box 51 of form CIS305, select the ‘Yes’ radio button * Enter each reference shown in Box 51 in the ‘AO Ref’ fields
Note it is not necessary to enter the references of any contractor schemes that the applicant has, as CIS Reform will automatically know these, so the PAYE references to be entered here are those that are strictly PAYE only.
* Select the [Next] button
- This takes you to the ‘Declaration’ window.
- In the ‘Declaration’ window
* Select the checkbox at the top right-hand corner of the window * Select the [OK] buttonYou should check again that the declaration has been signed before selecting the confirmation box at the top right of the window. If the application is being made by paper, the application form must be signed by the subcontractor, it cannot be signed by a Tax adviser on the subcontractor’s behalf.
Note - The wording on the ‘Declaration’ window differs between applications for net payment status and applications for gross payment status. There will be no confirmation that registration has been completed.
In the unlikely event that the subcontractor refuses to make the declaration required that the information given above is correct, you will need to select [Cancel] on this window which will take you back to the CIS Main Menu, the subcontractor should be advised that they have not been registered, and that any payments made will be subject to a deduction. This deduction will be at the higher rate if the subcontractor has not already previously registered for net payment status (payment under deduction).
You will be presented with a dialog box advising that the system will run a TTQT (Compliance Test). Once complete the system will notify the applicant of the outcome of the gross payment application. The system will record if the application has been successful. Where the application has failed the system will record all the reasons for failure. The applicant will receive form CIS308 detailing all the reasons why the gross payment application has failed.
- If the unincorporated body reported previous payments in Box 13 of form CIS305
* Note that you will get a warning – ‘Please remember to search for unmatched verifications’ * Select the [OK] button (warning message) * Select [OK]This takes you back to the ‘CIS Main Menu’ window * If you received a warning about Unmatched Verifications, go to [CISR51680 ](https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr51680)for an Action Guide covering this subject. * Put the form CIS305 away in the folder CIS31, see [CISR18020 ](https://www.gov.uk/hmrc-internal-manuals/construction-industry-scheme-reform/cisr18020)regarding maintaining internal records.
Note: that any application for gross payment by an Unincorporated Body will produce a “TTQT incomplete” result, and will be reproduced on to an associated worklist. All such cases should be referred to the CIS Advisory Team (See CISR97030) with the application for examination.
If the contact requires you to carry out further Registrations, then select the [New Customer] button, if however they do not then if you select the [End Contact] button this will take you back to the Identify Customer window. . When selecting the [New Customer] button a message is displayed stating “Click on the [New Customer] button again if a new customer is to be retrieved within the same contact”, this message is merely to confirm that you wish to view another customers CIS record within the same contact. If you do not then you should select the [End Contact] button instead.