CISR17050 - The Scheme: secondary legislation: regulation 4
This regulation deals with the monthly return: to be read in conjunction with FA04/S70.
The return should be made in a format approved by HMRC by 19t h of each month by any contractor making contract payments in that tax month and in the first tax month of the new scheme by any contractor who has made what would be a contract payment under the new scheme in the 12 months prior to commencement of the new scheme. SI2005/2045 reg 4(1).
The contractor’s name, UTR and AO reference; the tax month covered by the return; the subcontractor’s name, NINO or CRN; and information as specified in sub-section (3) must be included on the return: SI2005/2045 reg 4(2).
The following additional information to be included on the return
if the subcontractor is registered for gross payment
- the UTR, and
- the total amount of contract payments made: SI2005/2045 reg 4(3)(a).
if the subcontractor is registered for net payment
- the UTR
- the total amount of contract payments made
- the value of materials
the total amount of deductions made: SI2005/2045 reg 4(3)(b).
if the subcontractor is not registered for the scheme
- the UTR
- the total amount of contract payments made
- the value of materials
- the total amount of deductions made at the higher rate
- the verification reference for the higher rate deduction: SI2005/2045 reg 4(3)(c).
The return may be submitted electronically: SI2005/2045 reg 4(4).
The following declarations must be made by the contractor on the return
- none of the subcontractors listed are engaged under contracts of employment
- where necessary, subcontractors have been verified
- all required information has been entered on the return and that it is complete and accurate: SI2005/2045 reg 4(5).
Where the return is not electronically submitted, it must be signed by the contractor or a person duly authorised by them: SI2005/2045 reg 4(6).
The contractor must keep records to support the return: SI2005/2045 reg 4(7).
The contractor must provide net registered subcontractors with a written receipt or notification showing
- the contractor’s name and employer reference
- the tax month to which the payment relates or date of payment
- subcontractor’s name and UTR
- total amount of contract payments made during the tax month
- total value of materials
- total of deductions made from payments
- where the subcontractor is not registered for the scheme, the verification reference: SI2005/2045 reg 4(8).
The contractor can provide the receipt electronically if the subcontractor agrees and the information is capable of being stored and also printed in paper form if required: SI2005/2045 reg 4(9).
Where a contractor has made no contract payments during the tax month, they must submit a Nil return (SI2005/2045 reg 4(10)), unless they have applied for a period of inactivity (SI2005/2045 reg 4(11)).
If the contractor notifies HMRC that they do not intend to make any contract payments in the next 6 months they can claim a period of inactivity. SI2005/2045 reg 4(11).
TMA70/S98A penalties will apply to the requirements set out at sub-sections (1), (3b), (3c) and (10), subject to sub-section (13): SI2005/2045 reg 4(12).
TMA70/S98A penalties arise for each month or part of a month during which a failure to make a return continues after the 19th day of the sixth month following the appointed day: SI2005/2045 reg 4(13).ENABLING PROVISION - FA04/S70 (1) & (2)
(Note; CIS penalties under TMA70/S98A have effect only for returns with a filing date of 19th October 2011 and earlier. From the filing date of 19th November 2011 and later the legislation under which CIS penalties are issued became FA09/SCH55, this change became effective by SI2011/2391).