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HMRC internal manual

Construction Industry Scheme Reform Manual

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HM Revenue & Customs
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Monthly Returns and the End of Year (EOY) Process: Contractor scheme End of Year (EOY) Process

CISR69600 Action Guide contents
   

For each tax year up to and including 2012-13 the CIS system determined which schemes needed an End of Year (EOY) figure calculation for the tax year that has just ended, this was a fully automated process (from 6 April 2013 there is no EOY process as Monthly Return charges are now sent to ETMP on a daily basis).

EOY data about each scheme that was active at some point in the tax year was sent over to BROCS where it was then matched to a scheme reference. These figures were posted against that reference so that the end of year figures could be balanced. Where there had been a scheme transfer or merger in the year only one set of EOY information from one scheme was sent to BROCS (see CISR69030).

For each active contractor scheme found, automated checks were made to determine whether all expected returns for the tax year had been received and processed, with no exceptions that are likely to affect the EOY total tax deducted figure. The likely exceptions affecting the EOY figure include unreadable or minus entries within fields on submitted returns, as well as missing or ‘unmatched’ contractor returns.

The information sent to BROCS consisted of the total cumulated tax deductions for the year as shown on all the ‘effective’ and ‘concluded’ monthly returns captured, and that figure was given a status. The status of that figure was one of the following;

  • Inactive (I) - if the scheme had been inactive throughout the whole of the tax year. In this instance a ‘nil’ figure was passed to BROCS.
  • Full (F) - where a return has been received for each month that the scheme was ‘live’ and a return was expected, or any periods where no returns have been received, the return periods had been marked as exempt. (A return period can be marked ‘exempt’ for filing a return for that period, see CISR69050 for further information regarding EOY Return Exemptions) the amount of any CIS deductions made shown on the returns was passed to BROCS. If no CIS deductions were made by the contractor from their subcontractors a ‘nil’ figure was passed to BROCS.
  • Provisional (P) - where it was identified that;

    • not all expected returns for the scheme and tax year had been received, or
    • not all expected returns for the scheme and tax year had been processed (for example; where a return has been logged but not captured, or a return is still unmatched), or
    • one or more of the expected returns for the scheme and tax year had outstanding exceptions linked to them that affected the cumulated total tax deducted figure - such as unreadable or minus entries within amount fields on submitted returns.

    The CIS EOY total sent to BROCS was calculated from the ‘Effective’ or ‘Concluded’ returns held on the CIS record at that date. The effect of the ‘provisional’ status will result in any overpayment of tax deductions being withheld.

Example 1

A contractor submitted six monthly returns followed by a six month period of inactivity in the tax year; the status of the EOY total tax deducted figure for the six returns would be ‘Full’ as no returns would be expected for the period of inactivity.

Example 2

If a contractor ceased on 15 January 2010 and had submitted ten monthly returns covering April 2009 to the cessation date this too would be shown as ‘Full’.

Where this is the first EOY figure being sent to BROCS for the tax year, it showed this fact to BROCS by having an indicator of ‘New’.

End of Year (EOY) Amendments

After an EOY figure had been sent to BROCS if it became clear that this figure was no longer correct. This could be for any number of reasons, some examples being;

  • An outstanding return is received
  • The correction of subcontractor details on a return
  • Exceptions affecting the cumulated ‘total amount deducted’ figure for a scheme and previous year are resolved.
  • A return is processed which was not an ‘effective’ or ‘concluded’ return when the EOY figure was originally calculated.
  • A return is reallocated from one scheme or period to another following investigation of multiple returns or contractor correction of the return.
  • A return period for a scheme is marked as ‘exempt’, or an exemption is lifted. It should be noted that whilst the EOY figure may not change after recalculation it may change the status of that figure.
  • Scheme registration or cessation details are updated.

When any of these events occurred, the information previously sent to BROCS was reviewed and an amendment was automatically sent by the system. When an amendment resulted in a change to the EOY figures the difference between the last EOY figure calculated and the revised figure was sent to BROCS. This is best explained with the following example;

Example 3

The original EOY calculation is £2,000 and was sent to BROCS

A return is later corrected, and the revised EOY figure became £2,100. So CIS sent BROCS an amendment of plus £100

A further return is later corrected and the revised EOY calculation became £2,050

CIS now sent BROCS an amendment of minus £50.

The CIS system also determined whether the amendment was allocated a ‘Full’, ‘Inactive’ or ‘Provisional’ status in the same way as the original EOY calculation. It also showed the fact that this was an amendment to the original EOY total sent to BROCS by having an indicator of ‘Amendment’ when this was sent across to BROCS.

Multiple EOY Calculations sent on the same day

Only one EOY calculation was sent to BROCS for the same scheme and tax year. Any further amendment to the first EOY calculation was sent as an automated EOY amendment request. Where multiple EOY calculations were received for the same scheme and tax year on the same day only one request was processed and treated as the EOY calculation. The EOY total for a scheme was calculated at the end of the day and not at the point when the amendment or resend request is made.

EOY history window

An EOY History window is available and this will show for all tax years up to an including 2012-13 the following information collated from the CIS Monthly Returns captured, the periods of Inactivity that have been set, and the periods for which Return exemptions have been set;

  • The date the EOY total was sent to BROCS
  • The total amount of CIS deductions included in the EOY total
  • The ‘status’ of the EOY total, this will fall into the following categories;

    • Full
    • Provisional
    • Inactive
  • The type of notification, this will be;

    • New
    • Update
  • The reason which prompted the EOY total to be sent to BROCS.

If the only change made to the record did not affect the EOY status / figure then no update was sent to BROCS and this change was not reflected within this window. For detailed guidance about the entries visible in the EOY History window see CISR90090.