This knowledge-base article will give you a walk through of how to set up CIS employees in the Qtac Software.
You can also find details here on what tax codes to use and other details relating to CIS employee setup.
Subcontractors are employees who work for your company under the ‘Construction Industry Scheme‘ (CIS) and do not pay their NIC through their payroll.
Subcontractors are setup in the same way as PAYE employees except the NIC code is X and the tax codes are much simpler – see below for an explanation of CIS tax codes. To setup a CIS subcontractor you will need to tick the ‘Subcontractor’ tick box on the ‘General’ tab of ‘Employee Maintenance’.
This will default the Tax Code to ‘CT’ and the NI Number to ‘X – Exempt from National Insurance’.
Below are the three CIS tax codes. Instructions for verifying online and by phone are located below.
( CT: 20% – CTi: 30% – CT0: No Tax )
Once you have set up your employee and marked them as a Subcontractor, you can enter in additional information like a Contractor UTR and verification numbers under ‘Employee > Subcontractor Details‘
Select the business type to be either ‘Sole Trader’, ‘Partnership’, ‘Trust’ or‘Company’.
Trading Name & UTR / Company Registration Numbers
Enter a Trading or Company name in to this section along with the UTR and the company registration number
This is your online filing user-name and password that is used when submitting information to HMRC. It will be the same user-name and password you would use to log into the Government Gateway website: www.gateway.gov.uk
Verifying A Subcontractor
Before making the first payment to a subcontractor the contractor must confirm that the subcontractor is known to HMRC. Verifying the Subcontractor will check and confirm this with HMRC.
Subcontractors have a verification number which can be entered into the ‘Verification Number’ box or they can be verified through the software using this screen. Set the ‘Action’ option to ‘Verify’, check that you have the correct ‘ID Authentication’ details entered and like ‘Transmit Live’ to submit a verification request. The ‘Match’ action will simply check that the subcontractor details you have entered are correct against what HMRC have on record for the employee.
Subcontractors entered must be verified. When verifying, if the details do not match with HMRC data, then Subcontractor will be automatically put on a CTI tax code. This is the 30% deduction tax code. If you are not happy with this then you can also verify subcontractors on the phone with HMRC.
HMRC CIS Helpdesk : 0300 200 3210
If you are submitting CIS submissions for the first time then you will need to register with HMRC first to be able to submit CIS online submissions. You would need to request this with HMRC or register for the service online via the government gateway: www.gateway.gov.uk