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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: CIS: in-year and end-of-year process: what you will see on ETMP and BROCS

BROCS: CIS End of year details

For the years prior 2013-2014, around June each year, CIS would aggregate the totals of amounts deducted shown on the CIS monthly returns processed and send the CIS charge for the year with a CIS end of year status indicator of one of the following.

  • Full CIS Charge
  • Provisional CIS Charge
  • Inactive CIS Charge.

You can view the CIS charge indicators on BROCS (View Taxpayer Data F9 -DG year specific).

BROCS posting types and status indicators

Full status indicator

The ‘Full CIS charge’ status indicator is sent when all expected returns have been received and processed.

Provisional

The ‘Provisional CIS charge’ status indicator will be shown if either:

  • only some, but not all of the returns expected have been received or processed
  • a return has been logged but not captured
  • there are return exceptions working that may impact on the total tax deducted, for example, where an amount on a return is unreadable
  • there is a ‘Multiple’ return exception work item still waiting to be worked by the CIS Team in Newry.

Inactive

The ‘Inactive CIS Charge’ status is sent where a contractor scheme has not had any activity on the CIS scheme during the full year. Whenever this is set the CIS end of year charge will be nil.

ETMP postings

For the years after the contractor transferred to RTI, the CIS charges will be sent to ETMP.

CIS charge types and creation include the:

  • CIS return charge
  • CIS specified charge.

CIS return charge

Where the CIS scheme is ‘Active’, contractors are required to submit CIS returns (including ‘nil’ returns to April 2015) by the 19th following the end of each tax month. Following receipt of the CIS return, CISR sends ETMP details of the deductions reported on the CIS return and ETMP uses this information to create a monthly CIS return charge.

Where a nil CIS return is received, ETMP notes that the CIS filing expectation for that period has been satisfied. ETMP does not raise a nil charge.

Nil returns

Prior to April 2015, contractors must make nil returns if they make no payments to subcontractors in the month.

From 6 April 2015 contractors that have not made any payments under a construction contract are no longer obliged to submit a nil return to HMRC. After 6 April 2015, if contractors do not make any payments to subcontractors in a tax month they must still notify HMRC in order to avoid a CIS late-filing penalty notice and a CIS specified charge. HMRC will encourage contractors to file a nil return on a voluntary basis or they can call the CIS Helpline to let us know that no return is due.

New return signals

The following return signals are set on CISR and sent to ETMP.

Signal Description How it is set on CISR
Logged CIS return received but not yet captured. Manually
Exempt The contractor is exempt from filing a CIS monthly return for that period. Manually
Inactive HMRC are not expecting the contractor to file CIS monthly returns, as the contractor has advised that they are not active in CIS at this time. Manually
Missing CIS return data previously sent to ETMP has been removed on CISR; for example, the return relates to a different contractor. This signal advises ETMP to reverse the existing charge and that the CIS Return is still outstanding. Automatically

You can view the CIS return signals on ETMP, but you can only amend these on CISR.

CIS charge types on ETMP

From April 2013 two ETMP charge types were introduced.

  • In Year CISR
  • In Year CIS Specified

In Year CISR charge

Where the CIS scheme is ‘Active’, contractors are required to submit CIS returns by the 19th following the end of each tax month. Following receipt of the CIS return, CISR sends ETMP details of the deductions reported on the CIS return and ETMP uses this information to create a monthly CIS charge.

Where a nil CIS return is received, ETMP notes that the CIS filing expectation for that period has been satisfied. ETMP does not raise a nil charge. From April 2015 the obligation to file a nil return was replaced with a voluntary nil notification.

CIS specified charge

If, by the due date, ETMP does not receive a CIS charge, notification that a CIS nil return has been submitted or a CIS signal indicating no return is due, ETMP calculates a specified amount for that month based on the average amount due on the CIS charges received.

CIS specified charges are raised under the provisions of Regulation 11 of the Income Tax (Construction Industry Scheme) Regulations 2005.

If no CIS returns have been received during the tax year, the specified amount is calculated as a percentage of the estimated monthly yield carried forward from BROCS.

ETMP uses the specified amount to create a CIS specified charge. This process matches the specified charge process that already exists for RTI employers - see DMBM519250 on specified charges.

For PSC schemes, separate specified charges are raised for PAYE and CIS as appropriate.

Before raising a CIS specified charge, ETMP reviews the method used for submitting the previous CIS return. If the previous submission was a paper CIS return, ETMP allows additional time for the return to be processed and does not raise the CIS specified charge until ten days after all other specified charges are created.

Specified charges are not created if either:

  • any of the following signals are sent by CISR:
    • Logged
    • Exempt
    • Inactive
  • the CIS scheme start date is moved back from the original start date and we do not have CIS returns for those return periods.

If the contractor submits the outstanding CIS return or a quantification takes place, the CIS specified charge is ‘reversed’ and a new In Year CISR charge is created for the return/quantified amount. If the contractor submits a nil CIS return, the relevant CIS specified charge will be reversed. A nil CIS charge is not created.

CIS specified charges are also reversed if the exemption signal is subsequently received from CISR.

CIS specified charges are legally enforceable under Regulation 16 of the Income Tax (Construction Industry Scheme) Regulations 2005.