CIS online service verification issues

13 July 2016

Five issues are currently affecting subcontractor verification through the HMRC Construction Industry Scheme (CIS) online service.

The message below has been posted on the CIS service availability and issues web page and sets out what these issues are, and what to do if you encounter them.

Issue 1: verifications done previously online

If subcontractors’ verification details were obtained online, the HMRC CIS online service is removing those details when they become 2 years old. Therefore, when you look at those subcontractors’ records on the subcontractor list screen you will see ‘Unknown’ against the subcontractor’s verification number and tax treatment and the service is telling you that verification is required.

Issue 2: verifications done by telephone, where the data is then manually input into the HMRC CIS online service

If you previously verified any subcontractors by calling the CIS Helpline and then manually input the information into the HMRC CIS online service, these details will no longer be available for viewing. When you look at the subcontractor’s record on the subcontractor list screen you will see ‘Unknown’ against the subcontractor’s verification number and tax treatment and the service is telling you that verification is required. The option to input verification details manually has been removed to prevent contractors entering the wrong information for their subcontractors.

Action to take: issues 1 and 2

Where you use the HMRC CIS online service for verifications and for sending in your monthly returns, you will need to verify again the subcontractors you still use. If you no longer use the affected subcontractors, then you don’t need to verify them again and you can delete them from the HMRC CIS online service.

You should verify all your subcontractors online using the HMRC CIS online service where possible. This will update the information held on the subcontractors’ records within the service. In certain cases, you might need to verify one or more subcontractors by telephone through the CIS Helpline. You can verify up to 10 subcontractors on each call. Where you have verified subcontractors by telephone, you will later need to verify them again online so that their records are updated. This doesn’t happen automatically when you verify by telephone, and you can no longer input this information manually. You can still send in your return, even if you haven’t verified one or more subcontractors.

Issue 3: adding new subcontractors to the HMRC CIS online service

When you add a subcontractor to the HMRC CIS online service, you need to choose the right category of subcontractor from the 4 options available. These are:

• Individual
• sole-trader
• limited company
• Partnership firm or trust.

If you choose the wrong option you may not be able to verify the subcontractor later on.

Action to take

Where this happens, simply delete the subcontractor’s record and set them up again, choosing the right option.

Issue 4: using the HMRC CIS online service to send your return to HMRC

If you’re ready to send your monthly return to HMRC using the HMRC CIS online service and you have selected one or more subcontractors that need to be verified, you will get a message warning you about this.

Action to take

You can verify the subcontractors using the ‘Verify subcontractor’ link or, you can continue to send your return and re-verify the subcontractors at a later time, before your next return is due.

Issue 5: ‘Timeout’ error messages

The HMRC CIS online service was designed to handle a small number of subcontractors, and was provided for the benefit of contractors who were unable to purchase third-party commercial software. We have recently become aware that a few contractors have set up more subcontractors on the service than it was designed for. Where this happens, a ‘timeout’ error message may be displayed or the system will not work at all.

Action to take

There is no short-term fix for this issue. If you’re seeing a ‘timeout’ error message, you should reduce the size of your subcontractor list by deleting all those subcontractors you no longer use. Alternatively, you may wish to think about purchasing a suitable third-party commercial software package that can handle verifications and contractor monthly returns.