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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: CIS: overview

Outline of the system

From 2007-08 onwards annual returns of payments to subcontractors will no longer be required.

Instead, every contractor who makes payments to subcontractors in respect of construction operations must send to HMRC every month

  • a return CIS(300) with details of what has been paid to subcontractors in the month and
  • any deductions made from those payments.

The outstanding returns will move into IDMS on or around the 29th of the month.

Once the outstanding returns are received in IDMS they are visible on the IDMS TIS screen.

Nil returns

Contractors must make nil returns if they make no payments to subcontractors in the month. They must also make nil payment declarations.

Paper returns

If the contractors choose to use paper returns, we will send out a pre-populated return form completed with the names and taxpayers references of all subcontractors that the contractor has previously shown on the return or newly verified within the last three months.

Return period

The return period covers an income tax month - that is, from the 6th of one month to the 5th of the next.

Penalties

Penalties may be charged if the return is not made by the due date of 19th of the month.

Period of inactivity

Contractors who know they will not be paying subcontractors for several months should advise the CIS Helpline 0300 200 3210 who will suspend the issue of monthly returns and automatic penalties for up to six months.

If the situation changes and the contractor starts to engage subcontractors they must let us know so that we can start sending out the monthly return again.

How the return can be submitted

There are three ways contractors can make their monthly returns:

  • via the Internet:
  • electronically, using either Electronic Data Interchange (EDI) or other third party software.
  • by post to RDC Netherton.

Nil Returns

Nil returns can be made:

  • using the electronic methods mentioned above
  • using the paper return and completing the Nil Return check box and signing the return declaration
  • by the contractor calling the CIS Helpline (0300 200 3210).

CIS system

The CIS system holds contractor and subcontractor information and is capable of supporting the use of ‘e’ services, including communication over the Internet, clarifying status, and verifying and submitting returns.

BROCS

BROCS will continue to hold all details of tax paid and accounting records.

Further information

A more detailed overview is covered in E-learning Support for managers and staff.