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An article by this accountant           

New CIS from 6th April 2007



Submitted By: Fiona Rook ACA BSc(Hons) of My Business Centre Limited - Accountants in Exeter
Category Type: General Interest Article

Date Submitted: 25-09-2007 12:39:02


Key points


  • Online service available
  • No cards/certificates – replaced by a verification service
  • No vouchers – replaced by monthly returns
  • Deductions normally at 20% (see below)
  • Help line 0845 366 7899
Paying subcontractors

  • You should have received a letter from the Inland Revenue with a list of subcontractors that they know you use. These do not have to be verified.
  • For any subcontractor not on this list you must:

    • Contact the Inland Revenue on 0845 366 7899 (or www.hmrc.gov.uk/new-cis
    • They will need your

      • Your Tax reference (UTR)
      • Your Accounts Office Reference
      • The subcontractors details

        • Name
        • NI number
        • Tax Ref number = 1st 10 digits of their card number

    • They will then tell you how much (if any) to deduct, this will normally be at 20% but may be 30% if they have no record of the subcontractor
    • They will give you a verification number which you need to make a note of.
Monthly requirements - contractors

  • Complete monthly return form sent to you by Inland Revenue-

    • Use original continuation sheets if more than 4 subcontractors used (cannot photocopy).
    • The return will be partially completed by the Inland Revenue with details of any subcontractors you have verified or paid in last 3 months.
    • Check (or complete) entries in boxes 4.1 - 4.3 then complete 4.4 - 4.6
    • Put X in boxes 6 and 7 if the terms have been met
    • You must notify Revenue even if not used any sub-contractors in month, either complete back page of return or call helpline.
    • File your return on-line or sign and post as a LARGE letter in envelope provided– must arrive by 19th

  • Produce a payment and deduction statement for each subby for whom you have made a deduction – see example below
  • There will be no penalties for late filing up to 19th October but then there will be an automatic £100 penalty if late and a further £100 for each month thereafter.
Making payments to Inland Revenue

  • This process has not changed. The amount should be entered onto your yellow book slip and paid in the normal way.
If you would like us to help you prepare your CIS returns for you then please call Fiona on 01837 851676


Disclaimer
Whilst every effort has been made to ensure the completeness and accuracy of this Fact Sheet, My Business Centre Ltd expressly disclaim all and any liability and responsibility to any reader in respect of anything, and the consequences of anything, done or omitted to be done by any such person reliance wholly or partly upon the whole or any part of this Fact Sheet.


Example of a payment and deduction statement to be given to a subcontractor paid under deduction

CIS – Statement of Payment and Deduction





























































ABC Ltd Address 1
Town
Postcode
Contractors Reference No:  
   
Month ending: 5th
   
Subcontractor details:

Name:		  
Tax Reference (10 digits):  
NI number:  
Verification number (if at higher rate)  
 
£
Amount per invoice(s) A  
Less VAT B  
Total net amount charged C=A-B  
Less cost of materials D  
Amount liable to deduction E=C-D  
Amount deducted F = E x 20% (or 30%)  
Amount paid to subcontractor E-F  


Date Last Modified:- 25-09-2007 12:39:02


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