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This action guide explains how to process a company application for Gross Payment registration made on form CIS305. 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�.

Note: to begin to process an application for gross payment status from a company you will need as a minimum the UTR and NINO in respect of each of the company director鈥檚 (boxes 30 and 36 and boxes 31 and 37 from the form CIS305), and each of the company shareholder鈥檚 (boxes 43 and 48 and boxes 44 and 49 from the form CIS305).If this information is not supplied, then you will need to register the company for net payment basis (if not already registered) following the instructions at CISR42660.

Step 1. To register a Company subcontractor for gross payment firstly carry out only Steps 1 to 9 of the Action Guide at CISR42660 鈥� 鈥楻egister Company for Payment Under Deduction鈥�.

This takes you to the 鈥楽ubsidiary Company鈥� window

Step 2. In the 鈥楽ubsidiary Company鈥� window

• Check whether there are entries in Boxes 15 to 21 of form CIS305

If so

• Go to Step 3

If not

• Select [Next]
• Go to Step 4

Step 3. In the 鈥楽ubsidiary鈥� window

• Select the checkbox alongside the question 鈥業s the company wholly owned by a company(s) registered to be paid gross?鈥�
• Enter the UTR of the shareholder company as shown at Box 16 (or 19) of form CIS305 in the field alongside 鈥楽hareholding Company UTR鈥�
• Enter the percentage of shares owned by the shareholder company as shown at Box 18 (or 21) in the field alongside 鈥楶ercentage of shares held by the company鈥�
• Select [Find]

The CIS System will locate the shareholder company record and show its name and registration status alongside 鈥楾ax Treatment鈥�.

• Select the [Add] button (the CIS System will refresh the window and show the additional shareholder in the list under 鈥楶arent Companies鈥�)
• Repeat the last 4 steps for any additional parent company shown on the form CIS305
• Select [Next] when all parent companies have been entered

This will take you to the 鈥楾urnover鈥� window. If any of the parent companies is not a CIS Gross status company or the overall shareholdings are not fully accounted for, you will need to enter details of the applicant company鈥檚 turnover, as described at step 4 below. If this section is 鈥榞reyed out鈥� you should proceed to step 5) below to enter the bank account details.

Step 4. In the 鈥楾urnover Details鈥� panel of the 鈥楾urnover鈥� window

• Enter the number recorded at Box 22 of the form CIS305 in the 鈥楳aximum Number of Relevant Persons鈥� field
• Enter the amount recorded at Box 23A of the form CIS305 in the 鈥楪ross amount of payments鈥� field
• Enter the amount recorded at Box 23B of the form CIS305 in the 鈥楥ost of materials鈥� field
• Enter the amount recorded at Box 23C of the form CIS305 in the 鈥楴et Construction Turnover鈥� field

Note: The result of the test will be shown as 鈥楶assed鈥� or 鈥楩ailed鈥� alongside 鈥楾urnover Test Passed鈥�

Step 5. In the 鈥楤ank Account鈥� panel of the 鈥楾urnover鈥� window Enter

• the account name recorded at Box 24 of the form CIS305 in the 鈥楢ccount Name鈥� field
• the Sort Code recorded at Box 25 of the form CIS305 in the 鈥楽ort code鈥� field
• the account number recorded at Box 26 of the CIS305 in the 鈥楢ccount Number鈥� field
• 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 7

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 6

Step 6. 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 11

If you are satisfied that the bank account exists

• Select the 鈥極verride鈥� checkbox
• Select the dropdown arrow alongside the 鈥楻eason for Override鈥� field
• Select the appropriate description
• Go to Step 7

Step 7. If both the Turnover Test was passed and the bank account details are valid

• Select the [Next] button and the 鈥楧irector Details鈥� window opens
• Go to Step 8

Step 8. In the 鈥楧irector Details鈥� window

• Enter the number appearing in Box 27 of form CIS305 in the 鈥楾otal Number of Directors鈥� field
• Enter the name, address and postcode details appearing in Box 28 (or 34) of form CIS305 in the relevant fields
• Enter the director鈥檚 National Insurance Number (NINO) appearing in Box 31 (or 37) of form CIS305 in the 鈥楴INO鈥� field
• Enter the director鈥檚 UTR appearing in Box 30 (or 36) of form CIS305 in the 鈥楿TR鈥� field
• Enter the date appearing in Box 29 (or 35) of form CIS305 in the 鈥楧ate became a Director鈥� field
• Enter the PAYE reference(s) appearing in box 33 (or 39) if an 鈥榅鈥� has been entered in the 鈥榊es鈥� fields.
• Select the [Add] button
• Repeat the above steps for each additional director named on the form CIS305 or supplementary sheet
• When you have entered all the directors鈥� details, select the [Next] button

This takes you to the 鈥楽hareholders鈥� Details鈥� window.

Step 9. In the 鈥楽hareholders鈥� Details鈥� window

• Enter the number appearing in Box 40 of form CIS305 in the 鈥楾otal Number of 鈥楽hareholders鈥� field
• Enter the name, address and postcode details appearing in Boxes 41 (or 46) and 42 (or 47) of form CIS305 in the relevant fields
• Enter the Shareholders NINO from Box 44 (or 49) of the CIS305
• Enter the shareholder鈥檚 UTR appearing in Box 43 (or 48) of form CIS305 in the 鈥楿TR鈥� field
• Enter the PAYE reference(s) appearing in box 45 (or 50) if an 鈥榅鈥� has been entered in the 鈥榊es鈥� fields.
• Select the [Add] button
• Repeat the above steps for each additional shareholder named on the form CIS305 or supplementary sheet
• When you have entered all the shareholders鈥� details, select the [Next] button

This takes you to the 鈥楨mployer Obligations鈥� window.

Step 10. In the 鈥楨mployer Obligations鈥� window

• If there is an 鈥榅鈥� in the 鈥榊es鈥� box in Box 51 of form CIS305, select the 鈥榊es鈥� radio button
• Enter each reference shown in Box 51 in the 鈥楢O Ref鈥� fields

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
• This takes you to the 鈥楧eclaration鈥� window.

Step 11. In the 鈥楧eclaration鈥� window

• Select the checkbox at the top right-hand corner of the window
• Select the [OK] button
• Put the form CIS305 away in the folder CIS31, see CISR18020 regarding maintaining internal records.

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 a Tax adviser on the subcontractor鈥檚 behalf.

Note: The wording on the 鈥楧eclaration鈥� window differs between applications for net payment status and applications for gross payment status. There will be no confirmation that registration has been completed.

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.

You will be presented with a dialog box 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 the reasons for failure. The applicant will receive form CIS308 detailing all the reasons why the gross payment application has failed.

Step 12. If the company reported previous payments in Box 13 of form CIS305

• Note that you will get a warning 鈥� 鈥楶lease remember to search for unmatched verifications鈥�
• Select the [OK] button (warning message)
• Select [OK]

This takes you back to the 鈥楥IS Main menu鈥� window

• If you received a warning about Unmatched Verifications, go to CISR51680 for an Action Guide covering this subject.

If the contact requires you to carry out further Registrations, then select the [New Customer] button, if however they do not then if you select the [End Contact] button this will 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.