CISR31010 - Register and maintain contractor: overview: introduction

| CISR31600 | Action guide contents | |—————————————————————————————————–|———————–|

This paragraph serves as an introductory overview of contractor records.

For the contractor, the CIS system ensures that they make the correct payment to the subcontractor (gross or under deduction) as advised by HMRC during the verification process (see CISR50000 onwards).

A contractor needs to be set up on the CIS system when they begin to engage subcontractors, this is done by first setting them up on the Employers Business Service (EBS) and an overnight process will then run creating the contractor record on CIS.

All contractors have at least one contractor scheme on EBS and maintained by the centralised employer’s team (NICEO). Larger contractors who operate, and make payments of their deductions from employees and / or subcontractors to HMRC from more than one site, or where the business wants separate employee (‘P’ type) or subcontractor only (‘XP’ type) schemes can be set up with multiple schemes if required.

Soon after a contractor record is created on EBS, the contractor will be sent a letter notifying them of their

  • PAYE Tax Reference
  • Accounts Office Reference

When a new scheme is created, or an existing P (employees only) type scheme is amended on EBS to one of the following;

  • a PSC (employees and subcontractors) scheme, or
  • an XP (subcontractors only) scheme

all EBS records with newly set ‘XP’ or ‘PSC’ signals will be linked by an overnight process to the CIS system. The CIS record will also be updated immediately if the scheme type is changed on EBS to a ‘P’ type scheme from a ‘PSC’ or ‘XP’ scheme, or is ceased.

Important Notes

  1. There is no flow of information from CIS to EBS. To ensure that the EBS and CIS records match it is therefore very important that the centralised employer’s team is kept informed of scheme closures and changes in scheme type. Only by doing this will the EBS (and therefore CIS) record be updated, and the issue of unnecessary reminders or CIS penalties be prevented.
  2. If, at registration, the contractor’s UTR is not captured on to the contractor record in EBS (either because it is missing, incomplete or due to a processing omission) it cannot be shown on the CIS record. Such cases are known as ‘orphan schemes’. They will result in a priority work item being produced (Contractor Trace and Match) in order to establish the correct UTR for the contractor and enter this on to the EBS record. See CISR95620 for further details.

In the meantime, operators working on CIS on ‘orphan schemes’ are restricted in terms of what they can do with the scheme until the UTR is obtained and the scheme is fully registered. (For ‘orphan schemes’, functionality is largely limited to ‘Correct Return Error’, ‘Update Customer’ and ‘View Customer’.)