DMBM524560 - CIS: pursuit action: in-year PAYE work items contractor only schemes (XP)

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Establishing the debt in an XP case
Debt established by P101
Debt established by P100 or quantification

The CIS monthly return including details of payments and deductions made to Subcontractors can be viewed on the CIS computer system. The CIS charge is sent to ETMP each month.

Regulation 10(6) of The Income Tax (Construction Industry Scheme) Regulations 2005 allows the information contained in the CIS monthly return (contractor’s documents) to establish the contractor liability.

To find out if the case is subcontractor only check ETMP, Tax Officer, Scheme Data tab and scroll down to Scheme Description. In contractor-only cases it will show Subcontractor in the Fact Value column. If it shows PAYE Sub Contractors then the customer is an employer and a contractor.

If the case has a Subcontractor component, check CIS before taking any further action.

Establishing the debt in an XP case prior to 5 April 2013

To establish the debt in a subcontractor only case, check CIS to find out which returns have been received.

All monthly returns received

If CIS shows we have received all the monthly returns for the periods we are pursuing:

  • look at the ‘Total deducted’ figure on the ‘Total For Return’ section in the middle of the screen for each individual return period
  • deduct from the ‘Total deducted’ any payments received on BROCS for the appropriate months
  • issue P102 (Notice requiring payment - PAYE) for any amount that remains outstanding.

Some returns received

If some, but not all returns to the current month have been received:

  • use the figures shown on the CIS return (as above) to establish part of the debt for the relevant months
  • deduct any payments received for those months on BROCS
  • issue P102 (Notice requiring payment - PAYE) for any amount that remains outstanding
  • pursue the outstanding CIS returns in any contact with the contractor
  • unlink any remaining overdue month’s for which a CIS return has not been received and follow normal procedures.

Quarterly payment cases

In quarterly payment cases:

  • follow the same procedures as above
  • note that although contractors are now required to submit CIS returns monthly this does not change their right to choose to pay quarterly if they meet the criteria to do so.

No CIS returns received

If no CIS returns have been received:

  • follow existing procedures to pursue the contractor liability
  • pursue the outstanding CIS returns in any contact with the contractor.

Debt already established for years prior to 2013-14 and nil CIS return received

If a nil CIS return has been received or the CIS record is shown as inactive for any period (for example the contractor has advised that they are not intending to make payments to Contractors for up to six months) use IDMS RECORD ACTIONS to log a CLERICAL Nil PAYMENT POSTING for the corresponding PAYE In year work items.

Debt established by P101 for years prior to 2013-14

You must reduce the amount of the work item to Nil on IDMS if there is already

  • a debt established following the issue of P101 or
  • the Enforcement signal set at other than A.

Use IDMS AMEND WORK ITEM and reduce the amount of the work item to nil then log a CLERICAL Nil POSTING for the corresponding PAYE In year work items using IDMS RECORD ACTIONS.

Debt established by P100 or quantification for years prior to 2013-14

If there is already a debt established following quantification including P100

  • contact the contractor to establish the reason for the discrepancy and
  • follow up as appropriate.

Returns not received after 6 April 2013

CIS specified charge

If, by the due date, ETMP does not receive either:

  • a CIS charge
  • notification that a CIS nil return has been submitted
  • 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.