CIS: Why are our subcontractors now showing as unverified?
This is a phrase undoubtedly being heard in the offices of construction industry firms nationwide as HMRC appear to be having some CIS online service verification issues. Contractors looking to complete their latest monthly return may be logging on to their online services to find that many of their subcontractors are required to be verified, despite having been so before. H M Revenue & Customs have issued a statement on their website relating to this issue, and a few others, regarding CIS. It explains that, where “subcontractors’ verification details were obtained online, the HMRC CIS online service is removing those details when they become 2 years old”. What do HMRC advise you do? They say simply verify once more the subcontractors that you still use. It’s important therefore that those engaging subcontractors in the construction industry log on to their online services sooner rather than later to ensure they can re-verify the relevant subcontractors in time to make their next monthly submission.
A further issue identified is where contractors may be encountering “timeout” errors when trying to use the online service. HMRC state that this is due to some contractors setting up more subcontractors on the service than it was designed for. HMRC reminds contractors that the CIS online service was designed for those who deal with a small number of subcontractors and for whom it wouldn’t be realistic or cost-effective to invest in third party software. If you are encountering this issue the advice is to reduce the size of the subcontractor list by deleting those subcontractors who you no longer use. Failing this, contractors are advised to invest in suitable third party software that can handle subcontractor verifications and monthly returns.