|CISR51600||Action guide contents|
Monthly returns will be issued to each registered CIS contractor
with a contractor scheme record.
To set up a contractor scheme on CIS the following are necessary
The setting up of the CIS subcontractor record is covered at
A new contractor will open a contractor scheme by contacting the New Employers helpline (NESI) with relevant details of the new business. (See PAYE on line manual). NESI will allocate a new PAYE reference, and a new BROCS reference under which any PAYE/Subcontractor payments due are made. NESI will then fax the details to the Area office that deals with that business address. The Employers Section should then complete a form P510 and send it to the SA or COTAX Processing Office to inform them of the BROCS reference for the taxpayer.
Once the contractor scheme has been set up the contractor must contact HMRC to verify the existence of a CIS record, and payment status details for, the subcontractors to whom they have awarded contracts for work and to whom payments will become due.
Where a registered CIS contractor changes the type of their
concern, for example where a sole trader or partnership decides to
incorporate, you will need to set up a new CIS (and COTAX) record
with a new UTR. In the case of a new Limited Company a new PAYE
scheme and BROCS reference will also need to be allocated. In the
case of a sole trader or partnership that decides to incorporate
all of their existing subcontractors will need to be re-verified
under the new contractor scheme.
In some cases the change will not affect the contractor scheme record, for example where a sole trader admits a partner, or a Partnership of a husband and wife is continued by one of them as a sole trader. These changes will be treated as a continuing business and a new PAYE scheme and BROCS reference will therefore not be required, the old BROCS reference may be transferred to the new CIS record and allocated to the Partnership or sole trader. Because the subcontractor verifications are associated with the BROCS reference for the contractor scheme, it will still be possible to issue pre-populated contractor returns to the new contractor record in these circumstances and re-verification of existing subcontractors will not be necessary.
In other cases there may be a more fundamental change, where for example a continuing construction business is taken over by a completely new owner(s), in this case a new PAYE scheme and BROCS references will need to be allocated. Another example would be if two partners in a partnership each decided to become sole traders with each taking half of the subcontractor workforce with them, then new PAYE and BROCS references would be required for both of them. In these cases pre-population of the contractor monthly returns received will not be possible and each contractor would need to re-verify their own subcontractors.
It should not be necessary for the contractor to re-verify their subcontractors because of a change in the contractor's UTR but return exceptions are likely if HMRC is not kept informed of the changes.
Where a contractor merges one or more contractor schemes with
another you will need to contact the Employers Section to arrange
for contractor records for the affected cases to include the date
of the merger. When this is done and because the subcontractor
verifications are associated with the BROCS reference for the
scheme it will still be possible to issue pre- populated returns to
the new contractor record under the ‘merged’ scheme
It should not be necessary for the contractor to re-verify their subcontractors because of a merger of two BROCS scheme references, as these should automatically transfer across to the 'merged to' contractor scheme, but return exceptions are likely if HMRC is not kept informed of the changes.
This process may take up to seven days before CIS is displaying the correct information with the verifications from the old contractor scheme being transferred over to the ‘merged to’ contractor scheme.
Where a concern is taken over by another together with
outstanding contracts and workforce (subcontractors), and the
contractor scheme continues to be operated as before the take-
over, it will not be necessary for the new concern to re-verify
It will be necessary to contact the Employers Section and arrange for the BROCS scheme reference to be transferred to the new CIS record. It should not be necessary for the new concern to re-verify its subcontractors because of the take-over but return exceptions are likely if HMRC is not kept informed of the changes.
If however, following the take-over, a new Contractor scheme has been opened. Then the new owners will need to re-verify all of their subcontractors under the new contractor scheme reference as these will not be transferred across.