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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 - sole trader

CISR51000 Information contents
   

Follow the steps below to verify the existence and payment status of a sole trader.

Remember that the contractor/caller will often be seeking to verify more than one type of subcontractor during the same contact and you may need to refer to more than one action guide to complete the checks. However these are essentially the same except for the identifying details to be supplied.

Note: References in the action guide to ‘contractor’ also covers any ‘contact’ made by the contractor’s appropriate representative who is acting on their behalf.

Step 1Establish the number of subcontractors that the caller wishes to verify on this occasion. Where the number is more than ten the call must be handed on to the CIS Centre at Newry for a call back.

Step 2Use the ‘Authentication’ process to confirm that the contact is either the contractor or the contractor’s appropriate representative. If the verification request is being made by, say a wages clerk or the contractor’s spouse when authenticating the contact you should treat them as being the ‘customer’ when completing the ‘Identify Customer’ window. Refer to

CISR21000 for details of this process and for a reminder of the data items to be supplied for you to do this. Only after you have successfully authenticated the identity of the caller can you move on to Step 3. If the contractor is not registered for CIS the verification process must be postponed, refer to CISR31000 for more on contractor registration. If the contractor/caller cannot be authenticated ask them to call back when they have the correct details.

The Contact History Summary record will be updated as soon as a record is found.

Step 3From the CIS Main Menu

  1. Select the contractor scheme against which verifications are required to be made

  2. Select [Verify Subcontractor] from the menu options supplied at the bottom of the page.

This will take you to the ‘Declaration’ window
  1. Remind the contractor that the Monthly Return requires them to declare that the subcontractors that they use are self-employed.

  2. Ask the contractor to confirm that a contract exists with the subcontractor(s) for whom they are seeking verification during this contact/call.

* Select 'Yes' or 'No' from the fields to confirm their response to the question “Can the caller confirm that a formal arrangement is in place to engage each of the subcontractors in this request”
* Where the answer is ‘Yes’ select the [OK] button to go to the ‘Enter Identifier’ window.Note: The verification check can only continue once the employment status reminder has been given and the contractor confirms that a contract/tender is in place. If however, the contractor refuses to answer this question you will have no option but to assume that the answer is ‘Yes’, and continue with the verification.

If verification is to continue move on to item 5, below.

Ask the contractor to supply the subcontractor’s details below for entry in the appropriate fields on the ‘Verify Subcontractor’ window.

Remember that, to preserve customer confidentiality, the contractor should be supplying information and not be prompted by you.

  1. In the ‘Verify Subcontractor’ window under the ‘Enter Identifier’ heading
* Enter the Subcontractor's Unique Taxpayer Reference (UTR) in the [UTR] field.

and  


* Enter the Subcontractor's National Insurance Number (NINO) or Inland Revenue Personal Reference (IRPR – this is a number allocated by HMRC to a customer who does not have a NINO, and is in the format NNLNNNNN where “N” represents a number and “L” represents a letter) in the [NINO] field. However, where the subcontractor has not yet been allocated a NINO you may leave this field empty.
  1. Select the [Retrieve Subcontractor] button to check the details supplied match a subcontractor record on CIS.

This action will re-display the window showing any details found on the CIS database for the subcontractor and their current CIS payment status.

  1. If the subcontractor details displayed in the information panel match all those given by the contractor
* Select the [Verify] button and go on to item 13, below.

If having selected [Verify] you find that you have verified the wrong subcontractor. Under “Subcontractor Details” on the “Enter Identifier” window there is a checkbox to the left of the verified subcontractor’s name, by selecting this checkbox and then the [Remove] button the verified incorrect subcontractor will be removed from “Subcontractor Details”

If details are incorrect, ask the contractor to check the details supplied. The call may be terminated at this point to enable the contractor/caller to do this. Otherwise the subcontractor must be treated as ‘Unmatched’.

Note: Where

* the UTR, NINO or IRPR quoted are found but do not match the Name or Trading Name , or
* Two HMRC references are quoted (for example UTR + NINO) and one does not match that found on the CIS record

the contact should be treated as suspect and the ‘Bogus‘ indicator set using the tick box in the toolbar.

  1. If the contractor supplies alternative details
* Enter the alternative subcontractor details
* repeat step 5 above

Remember that, to preserve customer confidentiality, the contractor should be supplying information and not be prompted by you.

  1. If successful this time you can move on to item 13 below.

  2. If unsuccessful and the contractor still confirms the details to be correct, explain that the subcontractor is not registered and ask if they wish to continue with the verification process.

  3. If the contractor wishes to continue

* Select the [Enter Unmatched] button
* Complete the [Unmatched Subcontractor Details] window with details of the subcontractor for whom verification was attempted. This window must include the subcontractor's name or trading name to enable comparison with the contractor's monthly return to be made.
* move on to item 14 below.
  1. If the contractor does not wish to continue
* Select the [Clear] button the contact will end at this point unless the contractor has further subcontractors they wish to verify. 

Either,  


* return to item 5 to enter details for further subcontractors being verified

or,  


* terminate the contact by selecting the [Cancel] button as appropriate.
  1. Where the subcontractor(s) details are verified the information window will display a unique verification number (VR number), for example V1234567890, relating to all registered subcontractors that are verified at the time of this contact. The subcontractor you have just verified will now appear under the ‘Subcontractor Details’ heading on this same page, and as you continue to verify further subcontractors during this same contact, they will also be added under this heading. You can now tell the contractor what tax treatment should be applied to payments made to that particular subcontractor.
If for any reason you wish to remove a subcontractor from the list of subcontractors verified during a contact this can be done by clicking the check box to the left of the subcontractor's name under the 'Subcontractor Details' heading, and then clicking on 'remove'. The subcontractor’s name will then be deleted from the list of those verified during this contact   
  1. Where the subcontractor is not registered and therefore cannot be verified, the CIS system will provide you with an ‘Unmatched’ verification number that is unique to that subcontractor (Example V1234567890/AA). Ask the contractor to tell the subcontractor to contact HMRC to have an ID check carried out and complete an application for CIS registration.

  2. Remind the contractor to show the verification number on the next monthly return and until payments cease or they are advised of a change in payment status. The Contact History Summary record will be updated at this point with details of the successful verification. These will include:

* Employer Reference of the contractor scheme
* Contractor Scheme Name
* Date of the contact
* Contact subject, for example, Verify Subcontractor
* Contact Channel (for example, telephone)
* Direction of contact (In or Out)
  1. If further subcontractors are now to be verified return to step 5 above and repeat the process again until all subcontractors the contractor wishes to verify at this single contact are done

  2. Select [Complete Verification]

  3. If contractor requests written confirmation(s) of the contact and verification number(s),

* Tick the [Written Confirmation Required] button on the Written Confirmation window.

Otherwise,

* Select O.K and you will then be returned to the CIS ‘Main menu’ where you will be able to Verify subcontractors in another contractor scheme for that contractor, if required.

Note: If the paper channel is selected when authenticating the contact, then the written confirmation window will not appear. The system automatically assumes that a written confirmation of the verification will be required.