CISR42630 - Register and maintain subcontractor: the registration process: register sole trader for gross payment
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This action guide explains how to process a first registration application made on form CIS302 by a sole trader. . Before an application can be considered for 鈥楪ross Payment鈥 status the applicant must be registered. All successful registrations are automatically given 鈥楶ayment under Deduction鈥 status whilst their application for 鈥楪ross payment鈥 status is pending; this is done to avoid a subcontractor having to suffer deductions under the 鈥榟igher rate鈥.
- To register a subcontractor for gross payment firstly carry out only Steps 1) to 8) of the Action Guide at CISR42620 鈥 鈥楻egister Sole Trader for Payment under Deduction.
This will take you to the 鈥楾urnover鈥 window.
- In the 鈥楾urnover Details鈥 panel
- Enter the figures from
- Box 17 of form CIS302 in the 鈥楪ross Amount of Payments鈥 field
- Box 17(B) of form CIS302 in the 鈥楥ost of Materials鈥 field (enter 鈥0鈥 in the field if there is no entry in the form)
- Tab to the 鈥楴et construction turnover鈥 field and the CIS System will show
- the Net construction turnover calculated automatically
- whether the calculation results in a 鈥楶ass鈥 or 鈥楩ail鈥
- Go to Step 3)
- In the 鈥楤ank Account鈥 panel
- Enter
- the 鈥楢ccount Name鈥 as shown at Box 18 of form CIS302
- the bank 鈥楽ort code鈥 as shown at Box 19 of form CIS302
- the 鈥楢ccount Number鈥 as shown at Box 20 of form CIS302
- Select the [Validate] button and the CIS System will show whether the Bank Account details are 鈥榁alid鈥 or 鈥業nvalid鈥
If you see 鈥榁alid鈥 alongside 鈥楢ccount valid鈥 entry
- Go to Step 5)
If you see 鈥業nvalid鈥 alongside 鈥楢ccount valid鈥 and the message鈥楾he bank account is not registered in the UK鈥
- Go to Step 4)
- Where the bank account details appear to be invalid
- Telephone the applicant to explore the reason for the failure
If the Bank account remains invalid or where the Turnover Test has failed, or both, then you should select [Next] and not the [Cancel Gross] button on this window, you will then be presented with a dialogue box which says 鈥淧ress OK to cancel the application for gross and remain on net鈥, select [OK] to confirm the declaration for Payment Under Deduction. The system will then automatically write to the customer (CIS308) advising that they are registered for Payment under Deduction but they have failed the application for gross payment status. The reasons for failure will be detailed on the letter.
- Go to Step 8)
If you are satisfied that the bank account exists
- Select the 鈥極verride鈥 checkbox
- Select the drop-down arrow alongside the 鈥楻eason for Override鈥 field
- Select the appropriate description
- Go to Step 5)
- If both the turnover test was passed and the bank account details are valid, select [Next] you will be taken to the 鈥楨mployment History鈥 window
- Go to Step 6)
- In the Employment History window
If 鈥榊es鈥 has been selected at box at Box 21 of form CIS302
- Select the 鈥榊es鈥 radio button alongside the question 鈥楬ave you been fully employed or self employed for the last 12 months?鈥
- Select the [Next] button (this takes you to the 鈥楨mployer Obligations鈥 window
If 鈥楴o鈥 has been selected at box at Box 21 of form CIS302
- Select the 鈥楴o鈥 radio button alongside the question 鈥楬ave you been fully employed or self employed for the last 12 months?鈥
- Enter the 鈥楻eason鈥, 鈥楧ate from鈥 and 鈥楧ate to鈥 details as shown on form CIS302 in the matching fields
If the applicant has entered 鈥極ther鈥 in any of the 鈥楻eason鈥 boxes and provided details in the 鈥榦ther鈥 box.
- Enter this description in the 鈥極ther鈥 field(s)
- Select the [Next] button
This takes you to the 鈥楨mployer Obligations鈥 window
Where the applicant has selected 鈥淣o鈥 at Box 21 but supplied no further details,then you will need to abandon the Registration application by selecting the [Cancel Gross] button, this will take you to the Declaration window where the operator should select the[Cancel] button, this will mean that the subcontractor is registered for payment under deduction, and will then take you back to the CIS Main Menu. You should write to the subcontractor asking for details of their activities over the last 12 months so that Registration for gross payment may continue.
- In the 鈥楨mployer Obligations鈥 window
If 鈥榊es鈥 has been selected at Box 22 of the form CIS302
- Select the 鈥榊es鈥 radio button alongside the question 鈥楢re you an employer?鈥
- Enter the 鈥楨mployer PAYE鈥 reference(s) quoted by the applicant in the matching 鈥楢O Ref鈥 fields in the window
Note
it is not necessary to enter the references of any contractor schemes that the applicant has, as CIS Reform will automatically know these, so the PAYE references to be entered here are those that are strictly PAYE only.
- Select the [Next] button
If 鈥楴o鈥 has been selected at Box 22 of the form CIS302
- Select the 鈥楴o鈥 radio button alongside the question 鈥楢re you an employer?鈥
- Select the [Next] button
- This takes you to the 鈥楧eclaration鈥 window.
- In the 鈥楧eclaration鈥 window
- Select the check box at the top right-hand corner of the panel
- Select [OK] this will take you back to the CIS Main Menu
You should check again that the declaration has been signed before selecting the confirmation box at the top right of the window. If the application is being made by paper, the application form must be signed by the subcontractor, it cannot be signed by aTax adviser on the subcontractor鈥檚 behalf.
Note that the wording on the 鈥楧eclaration鈥 window differs between applications for net payment status, and applications for gross payments status.
In the unlikely event that the subcontractor refuses to make the declaration required that the information given above is correct, you will need to select [Cancel] on this window which will take you back to the CIS Main Menu, the subcontractor should be advised that they have not been registered, and that any payments made will be subject to a deduction.This deduction will be at the higher rate if the subcontractor has not already previously registered for payment under deduction.
- If you selected the checkbox 鈥楬ave you been paid by a contractor since 6 April 2007?鈥 at Step 8 of CISR42620 (Register Sole Trader for Payment under Deduction) for you will see a warning 鈥楶lease remember to search for unmatched verifications鈥.
- Select the [OK] button this will take you back to the CIS Main Menu.
- Carry out the 鈥楿pdate Unmatched Verifications鈥 procedure
- Put the form CIS302 away in the folder CIS31, see CISR18020 regarding maintaining internal records.
You will be presented with a dialog advising that the system will run a TTQT(Compliance Test). Once complete the system will notify the applicant of the outcome of the gross payment application. The system will record if the application has been successful. Where the application has failed the system will record all reasons for failure. The applicant will receive form CIS308 detailing all the reasons why the gross payment application has failed.
If the contact requires you to carry out further Registrations, then select the [NewCustomer] button, if however they do not then if you select the [End Contact] button thiswill take you back to the Identify Customer window. When selecting the [New Customer] button a message is displayed stating 鈥淐lick on the [New Customer] button again if a new customer is to be retrieved within the same contact鈥, this message is merely to confirm that you wish to view another customers CIS record within the same contact. If you do not then you should select the [End Contact] button instead.