CIS: Pursuit action in the DTO: In-year PAYE work items contractor only schemes (XP)
The CIS monthly return including details of payments and deductions made to Subcontractors can be viewed on the CIS computer system.
Regulation 10(6) of The Income Tax (Construction Industry Scheme) Regulations 2005 allows the information contained in the CIS monthly return (contractor’s documents) to establish the contractor liability.
To find out if the case is subcontractor only check BROCS VIEW TAXPAYER DESIGNATORY DATA (Format 9, VTP, AO Ref, ASN, DG). In contractor only cases the SECTION CODE is SC.
If the SECTION CODE is SC check CIS before taking any further action.
Establishing the debt in an XP case
To establish the debt in a subcontractor only case:
- check CIS to find out which returns have been received.
All monthly returns received
If CIS shows we have received all the monthly returns for the period(s) we are pursuing
- look at the ‘Total deducted’ figure on the ‘Total For Return’ section in the middle of the screen for each individual return period
- deduct from the ‘Total deducted’ any payments received on BROCS for the appropriate month(s)
- issue P102 (Notice requiring payment - PAYE) for any amount that remains outstanding.
Some returns received
If some, but not all returns to the current month have been received
- use the figures shown on the CIS return (as above) to establish part of the debt for the relevant months
- deduct any payments received for those months on BROCS
- issue P102 (Notice requiring payment - PAYE) for any amount that remains outstanding
- pursue the outstanding CIS returns in any contact with the contractor
- unlink any remaining overdue month’s for which a CIS return has not been received and follow normal procedures.
Quarterly payment cases
In quarterly payment cases
- follow the same procedures as above but
- note that although contractors are now required to submit CIS returns monthly this does not change their right to choose to pay quarterly if they meet the criteria to do so.
Therefore if for example you are considering establishing a debt for the first quarter and you check CIS and returns have been received for months 1 to 4 you can only establish and pursue the debt for months 1 to 3.
No CIS returns received
If no CIS returns have been received
- follow existing procedures to pursue the contractor liability
- pursue the outstanding CIS returns in any contact with the contractor.
Debt already established and nil CIS return received
If a nil CIS return has been received or the CIS record is shown as inactive for any period (for example the contractor has advised that they are not intending to make payments to Contractors for up to six months) use IDMS RECORD ACTIONS to log a CLERICAL Nil PAYMENT POSTING for the corresponding PAYE In year work items.
Debt established by P101
You must reduce the amount of the work item to Nil on IDMS if there is already
- a debt established following the issue of P101 or
- the Enforcement signal set at other than A.
Use IDMS AMEND WORK ITEM and reduce the amount of the work item to nil then log a CLERICAL Nil POSTING for the corresponding PAYE In year work items using IDMS RECORD ACTIONS.
Debt established by P100 or quantification
If there is already a debt established following quantification including P100
- contact the contractor to establish the reason for the discrepancy and
- follow up as appropriate.