CISR51120 - Verify subcontractor: overview: Unmatched verification

CISR Reference	Topic
CISR51600	Action guide contents

Unsuccessful/unmatched verification

Where the verification check is unsuccessful and the contractor continues with the verification process they will be provided with a similar verification reference (VR) number (example V1234567890/A). That reference will be unique to that unverified subcontractor and will need to be shown by the contractor on the Monthly Return (CIS300). The contractor will be advised that

• the subcontractor is not registered for CIS
• they may make payment but only under a higher rate of deduction
• they should tell the subcontractor to contact HMRC and arrange for an ID check to be carried out in order that a CIS record may be set up.

Note: once the subcontractor has successfully registered for CIS, HMRC will issue a CIS313 in confirmation and issue notification of their change of tax treatment (CIS316) direct to the contractor to confirm that future payments are to be paid Net of Deduction at the standard rate, or Gross, as appropriate. The unique VR number will remain on the CIS record for the subcontractor as will a record of the unmatched period for which they were unregistered and received payments under the higher rate of deduction. Once the subcontractor has registered for CIS those unmatched periods must be linked to the UTR record in order to calculate overall annual totals of payments and deductions.

When an unmatched verification is created, it may be treated as ‘suspect’. This happens if a subcontractor is recognised by CIS but the COTAX record for the company is found to be ceased, the system prevents a matched verification from being created. The unmatched verification is then marked automatically as suspect by the system with no operator involvement or decision required. Unmatched verifications are also marked automatically as suspect where the subcontractor reference (UTR) is recognised but the name and NINO or CRN provided does not match our records. In ‘View Customer’ details, any unmatched verifications marked as ‘suspect’ will appear in the verification table under the ‘suspect indicator’ column.

Deceased Subcontractors

Before 27th October 2008, where a contractor attempted to verify a deceased subcontractor, the system will have displayed a message to say that

• the subcontractor was deceased,
• the verification should be ‘Unmatched’, and
• a deduction at the unmatched rate should be made from any payment the contractor proposed to make to the estate of the deceased subcontractor.

See CISR51010 for what happens from 27th October 2008 in relation to the verification of deceased subcontractors.