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HMRC internal manual

Construction Industry Scheme Reform Manual

From
HM Revenue & Customs
Updated
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Verify subcontractor: overview: verify subcontractor: company

CISR51600 Action guide contents
   

Before making a first payment to a subcontractor the contractor or the contractors’ appropriate representative acting on their behalf must contact HMRC to confirm that the subcontractor is known to HMRC and registered with CIS and to obtain details of the subcontractor’s payment status. This process is known as ‘Verification’. Contractors may choose to make separate contact/calls for each subcontractor that they wish to verify, but many will wish to verify more than one subcontractor at the time of each visit or call.

A contractor may contact HMRC using a number of different channels, for example,

  • by telephone (to verify a maximum of 10 subcontractors)
  • by Internet using the Government Gateway
  • in person at a local Enquiry Centre
  • in writingDepending on the number of subcontractors the contractor/caller wishes to verify, they may be redirected to another channel. For example, where more than 10 subcontractors are to be verified by telephone at any one time.

Confirming the Identity of the contractor/callerAt the time of contacting HMRC the contractor will initially be expected to provide sufficient information for you to confirm that the caller is the contractor or the contractors’ appropriate representative acting on their behalf. This process is known as ‘Authentication’ refer to

CISR21000 for more details about authentication. Remember however that an employee of the contractor, or the contractor’s spouse may ring to verify subcontractors in their capacity as payroll clerk, and provided they have all the information relating to the contractor to pass ‘Authentication’ you should not refuse to verify a subcontractor to someone acting in this capacity.

Having confirmed the identity of the caller the contractor will be expected to confirm that a contract has been agreed, or a tender is in place with each of the subcontractors they wish to verify on that occasion. This is recorded on the CIS record on the ‘Declaration’ window.

Identifying the subcontractorIt is important that HMRC can establish the identity of subcontractors working within CIS and for this reason the contractor must provide specific information about the subcontractor(s) that they wish to pay under the Scheme. Namely,

  • COTAX Unique Taxpayer Reference (UTR)
  • Company Registration Number (CRN)
  • Trading name known to HMRCThe CIS system will check to see if the system holds a CIS record for the subcontractor.

Where you do have such a record we will confirm to the contractor that the subcontractor is registered for CIS, and tell the contractor to either make payments

  • Gross (without any deduction)

or

  • Net of a standard rate of deduction.Where you

do not have a record or cannot find one for the subcontractor because of incorrect or incomplete information you should tell the contractor that the subcontractor does not appear to have registered for CIS. The contractor should be advised to make a deduction from the payment at the higher rate until the subcontractor can be verified. Additionally, you should ask the contractor to tell the subcontractor to contact us and arrange to go into a local Enquiry Centre for an identification check and complete a registration form CIS305.

Contact wishes to verify more than 10 subcontractors by telephoneWhere a contractor telephones and confirms that they wish to verify more than 10 subcontractors at any one time the Contact Centre will advise that a call back will be needed. The Contact Centre will then take details and create a work item for the CIS Centre at Newry to action who will call the contractor back for verification of 11 or more subcontractors

Contact wishes to verify less than 10 subcontractors by paperWhere a paper request is made to verify 10 subcontractors or less, this request should be handled in the office that receives it,

and it need not be forwarded to the contractor’s processing office, with a written reply going out to the contractor by post. Your letter should tell the contractor that a quicker service can be obtained by contacting the Contact centre (See CISR97020) or by making the request online via the HMRC Website.

Contact wishes to verify more than 10 subcontractors by paperWhere a contractor writes and confirms that they wish to verify more than 10 subcontractors at any one time, the Processing Office should

on the same day as it is received fax the request through to the CIS Centre at Newry (See CISR97060) who will deal with it. The CIS Centre will aim to deal with the request from the contractor within 48 hours of receipt.