New Construction Industry Scheme - Mailshot to CIS contractors

A letter and a paper list (for contractors with 125 or fewer subcontractors) or a letter and a CD-ROM (for contractors with 126 or more subcontractors) are being sent in late November to all registered contractors. The lists are of subcontractors paid since 6 April 2005 do not therefore require verification under new CIS.

As other subcontractors may be engaged before April 2007 or the tax circumstances of some subcontractors may change before then, the list is not the final list and will be replaced by a current list in March or April 2007.

The list provides, for each subcontractor, the subcontractor's Unique Taxpayer Reference (UTR), name, NI number or company registration number, the date of the tax month in which the subcontractor was last paid, and the tax treatment to be applied, i.e. gross or net payment.

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New Construction Industry Scheme (New CIS) - mailshots

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HMRC has written to those contractors in the Construction Industry who currently use software to print CIS vouchers and substitute continuation sheets for their annual returns. They are advised to check whether their current software provider is planning to upgrade its software to support new CIS and, if it is, what exactly it will involve. If the software development has no plans for a CIS upgrade, consideration must be given on whether to complete and file the new monthly returns on paper or online.

For contractors choosing the paper option, HMRC will send a partially completed form listing the subcontractors that HMRC's record show as having been recently paid by the contractor. Any newly paid subcontractors will have to be added by the contractor, and all of the payment information for the month. As substitute forms will not be permitted, the paper return will have to be completed manually.

Contractors preferring to file online have a number of options:

• using HMRC's free "Online Return and Forms - CIS" service, suitable for reporting up to 50 payments each month
  
  
• upgrading or replacing current CIS software in order to file monthly returns online
  
  
• updating current software using in-house resources to support filing over the Internet or by EDI.

The CIS Helpline, 08453 667899, can give further advice on filing monthly returns.

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