Deductions: checking of deductions: examining the payment and deduction statement received from the subcontractor
|CISR73600||Action guide contents|
Checking a Payment and Deduction Statement (PDS) is basically a matter of examining the submitted PDS against the CIS system record of the contractor’s monthly return details for the same period. The check is to establish that the contractor’s monthly return has been received and that the details on the two match.
In most cases the contractor’s monthly return which relates to the PDS you are trying to check will have been captured and the details shown on the CIS system will be the same as on the subcontractor’s statement. This will enable you to check the deduction quickly and proceed to give credit or make repayment as required.
To carry out this process you will need to view payment and deduction details submitted by the contractor on their monthly returns. These details will be transferred to the subcontractor’s CIS record and can be accessed through the View CIS Customer facility for the subcontractor concerned. The action guide at CISR73620 will take you through the steps necessary to complete this process.
Payment and deduction statement details do not match
The important things to look for here are
- an alteration on the subcontractor’s copy of the PDS showing a larger amount of deduction than on the CIS system.
- The date on the subcontractor’s PDS may differ from that on the CIS system. This may have been altered by the subcontractor to make it appear that the payment falls within a different tax year or accounting period.
Generally any PDS which involves a conflict of these details with the contractor’s monthly return details recorded on the CIS system for the same period should be referred using the RIS/CIS Referral stencil for further action. They will then consider the circumstances of the claim and may decide that the case should become the subject of an SA enquiry or be referred to the Construction Industry Team or Criminal Investigations (CI).
The ‘subcontractor payment details’ window within View CIS Customer may warn that a contractor’s monthly return ‘totals are based on readable data only’. This will indicate that the entries recorded here are incomplete and it is quite possible that in these cases the details on the PDS will not match those on the subcontractor’s CIS record. On these occasions the user will want to know what was actually written on the contractor’s return. A request should be made to the HMRC Liaison Team at Netherton through the CIS Business helpdesk to obtain a copy of the image captured by them before a check of the PDS can take place.
You may also need to examine earlier versions of the contractor’s monthly return where there have been amendments to the return. To view details of the contractor’s return submitted to HMRC along with any amendments to that return you should access ‘View CIS Customer: contractor scheme returns’. For further details see CISR90040. However, where return details have been amended you should restrict the allowance of any credit to the deduction actually made from the payment.
Payment and deduction statements agree the CIS system
Once a payment and deduction statement passes the relevant checks you can proceed to give credit or repayment.