Follow this guide to set up
- Company as a Contractor
- Employees as Subcontractors
Setup #
You will need an existing company. This can be a PAYE company which already exists and has been imported, or import a single FPS to set up a new company from scratch.
- Home ‣ Company Setup
- Update the company and enter the contractor UTR (Unique Taxpayer Reference) and click Update
- Home ‣ Company Setup ‣ Report definitions
- Add a GB CIS300 Report Definition to submit your monthly return
- Add a GB CIS Verify data feed to enable online verification of subcontractors
- Usually, you will have a Payslip2 Report Definition which also can display the Construction Industry Scheme Payment and deduction statement
- Home ‣ Employee setup Add or Update each employee who will be a subcontractor
- Employee fields
- Enter the usual employee fields: Username, Email, Name, Start date
- Bank
- Optionally add bank details if needed
- Tax
- Change the CIS field to sole trader/partnership/trust or company and click Update
- Only change to a CIS type if you can confirm that the employment status of the individual included has been considered and payments will not be made under a contract of employment
- Weekly hours worked can be set to Other
- Tax (Employee-specified)
- Either enter the
- Subcontractor Trading name
- Subcontractor UTR and
- Company Registration Number (CRN) fields
- or ask the Subcontractor to complete these fields using their mobile self-service app.
- Not all fields will apply e.g. a Partnership only has a UTR and Name.
- Either enter the
- Employee fields
Operation #
Pay Items #
Pay Item editor ‣ Create Shift/Material pay items to the subcontractor and enter appropriate positive Shift and negative Materials values. You may also wish to Upload or use a data feed for large numbers of pay items.
Shifts use positive payment values; Materials must use negative values
Click Show all to view the CIS Pay Item. Then you can enter the Verification number, if applicable and the Tax rate:
Click Update when done and check the mini payslip.
Verification #
Before you pay a new subcontractor, you must ‘verify’ them with HMRC using the CIS Verification data feed:
Home ‣ Datafeed ‣ GB CIS Verify ‣ Start
For every subcontractor who is verified, the feed will update the employee subcontractor verification number with the number received from HMRC together with the deduction rate. You must verify every subcontractor every 2 tax years. The output of this verification is to add the Verification number and Tax treatment status to the CIS Pay Item inputs. Do not modify these values.
Payrun #
Running a CIS pay run is the same as a PAYE pay run. Click Redo and the payslips (Construction Industry Scheme Payment and deduction statement) will be created.
Upon approval, the CIS 300 report will be submitted.
Creating CIS Pay Definitions #
Generally, you will not need to create CIS Pay Definitions as the usual import process will create these and you can disregard this section.
Busses #
There are 2 CIS specific busses in the system:
- Gross pay for CIS purposes
- Cost of materials
Any Pay Definitions used for CIS must be configured to connect to these busses and not to the usual PAYE or NIC busses. The normal setup process should provide 2 standard Pay Definitions:
- Shift (CIS) 1 for payments
- Materials (CIS) 1 for cost of materials
You will notice that these definitions are numbered – which allows for additional definitions to support multiple shifts and materials e.g. Shift (CIS) 2.
Only if these pay definitions do not exist, or you need to create new CIS Pay Definitions e.g Shift (CIS) 2, you must ensure the output busses are correctly configured for CIS:
- For CIS Gross Pay:
- Home ‣ Company Setup ‣ Pay definitions, add a new Pay definition
- Select the Per Unit Pay Template
- Un-tick all busses, then tick the following busses:
- Gross pay for CIS purposes
- .Gross pay
- .Net pay
- Gross pay for OD purpose
- For CIS Materials:
- Home ‣ Company Setup ‣ Pay definitions, add a new Pay definition
- Select the Per Unit, or Deduction Pay Template:
- Un-tick all busses, then tick the following busses:
- CIS cost of materials
- Gross pay for CIS purposes