CISR42010 - Register and maintain subcontractor: the registration process: introduction
This paragraph serves as an introductory overview of applications by subcontractors who wish to register for either payment under deduction or gross payment status.
The following guidance covers the application forms used by subcontractors when registering for payment under deduction or gross payment status for each type of subcontractor, and the various methods by which they may submit an application to HMRC.
Subcontractors who have not registered will, if paid by a contractor for construction work, have a deduction at a 'higher rate' currently 30% until such time as an application is made to register, and the contractor has obtained a 'matched verification' for the subcontractor. See CISR51000 for more on 'Verification'.
Registration for CIS
CIS registration for subcontractors is only required once unless there is a change to the business structure e.g. sole trader is incorporated. Applicants should ensure they have a UTR and that a live SA or live COTAX record is held.
Individual applicants (sole traders and partnerships) seeking to register for CIS can do so :-
- online by completing and submitting the relevant registration form or
- by sending a completed paper application form CIS301, CIS302 or CIS304 direct to PT Operations
Companies and Unincorporated bodies wishing to register for CIS can do so :-
- online by completing and submitting the relevant registration form or
- by sending a completed paper application form CIS305 direct to PT Operations
See how to register on GOV.UK
Trust Registration applications will be dealt with in the Self Assessment (SA) Processing Office for the Trust or the Trustee, this may well be one of the specialist Trust offices (See TSEM1420).
For Local Authorities, Government Departments or NHS Trusts that wish to register for CIS, these cases are set up in South Wales Area (Service), the relevant instructions in this Manual are as follows:
| Taxpayer | CISR Reference |
|---|---|
Local Authorities |
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Government Departments |
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NHS Trusts |
Note: It is therefore vitally important that where you receive a paper application to register for CIS that these applications are forwarded to the correct owning office for the applicant on the day of receipt of the application by HMRC.
Prerequisites of CIS registration
To register for CIS, either for gross payment or payment under deduction, sole traders and partners within firms must have previously registered for SA on a self-employed basis and have a live SA record, though this can be done at the same time as the CIS registration. Companies will need to have registered for COTAX and have a live COTAX record.
For a sole trader or a partner in a partnership without a National Insurance number (NINO), they will be asked to apply for a United Kingdom NINO and to do that they will be asked to attend an ‘Evidence of Identity interview’ at the Department for Work and Pensions (DWP), see CISR42170 for more information about the NINO. Any applicant seeking to register for CIS without a UK NINO will be told about this when first contacting HMRC.
CIS Helpline
The CIS helpline no longer completes requests for CIS registrations and is not able to register any applicants for SA or COTAX. The CIS helpline may need to advise the applicant to contact the DWP where the applicant has been asked to apply for a UK NINO and to possibly undergo an identity check (see CISR42150). In company cases, the hand-off will be to the Local Processing Office. In all cases, the CIS hlepline should advise the applicant of the online CIS journey (detailed above) or of the paper CIS registration form (CIS301, CIS302, CIS304 or CIS305). Additionally, where the applicant is not yet registered for corporation tax under COTAX or self employment under SA they should be advised to do so. Where the applicant does not hold a verifiable UK NINO, see the guidance at CISR42170.
DWP
If it is clear that the customer is not in a position to be dealt with by these methods, then the appropriate forms will be given to the customer and they will be asked to contact DWP to arrange an ‘Evidence of Identity interview’ where appropriate, (see CISR42170). The applicant will also be asked to provide evidence to show that the Business Test (see CISR45000) and Turnover Test (see CISR44000) are passed. If an identity check is not required, the customer will be told to complete the necessary application forms and send them direct to the address printed on them where the registration process will be undertaken for CIS (and for SA or COTAX, if required).
Helpline for the Newly Self-Employed (HNSE)
HMRC also has a Helpline for the Newly Self-Employed (HNSE) and customers can ring this unit to be registered for self employment. The setting up of a customer for self employment at HNSE involves the creation of the appropriate record on the NIRS2 system and an electronic form CWF1 which then goes to NICO Central Agent Authorisation Team (CAAT) for the creation of an SA record. Callers also often wish to register for CIS at the same time. In all cases where a caller wishes to register for both self-employment and CIS (for net payment only), HNSE will now create an electronic form CWF1 that will indicate the caller's wish to register for CIS. The electronic CWF1 will be sent to NICO CAAT who will be able to identify it as a CIS registration and give it priority in order to achieve HMRC's aim of turning round CIS registrations for net payment status within 15 days. HNSE will only be able to take this action where the caller is seeking to register for net payment and already has a NINO. This process allows the CIS registration to be undertaken quickly and it also avoids the need for the completion of a CIS registration form CIS301 as nearly all the information on the CIS301 is also on the form CWF1.
The Recommended Route for CIS Applicants
It is recognised that applications to register for CIS need to be processed quickly as any delays in the registration process could mean the difference between deductions being made from the subcontractor's payments at 30% instead of the standard rate of 20% or even payment being made gross. HMRC has given an undertaking that all applications for net payment status from subcontractors will be dealt with as soon as possible after receipt. In normal circumstances, this should be within 15 working days following the receipt of the application.
It is recommended therefore, that if the caller contacts the CIS helpline and needs to register for both CIS and SA, and does have a valid NINO, the customer should then be referred to online access register for self assessment or the HNSE but this route will not be appropriate where the customer is seeking to register for gross payment. However, if the caller contacts the CIS helpline and needs to register for both CIS and SA, but doesn't have a valid NINO, the applicant should be asked to apply for a UK NINO by telephoning the Department for Work and Pensions (DWP) on 0845 600 0643. As part of this process, they will be asked to attend an Evidence of Identity interview and they should not, in CIS registration cases, be referred to the HNSE. Where the customer claims they do not need a UK NINO because they do not have to pay UK National Insurance, see the guidance at CISR42170.