The Construction Industry Scheme (CIS Scheme)
The taxation rules governing payments to Sub Contractors
changed with the commencement of the 1999/2000 Tax Year, when
the University became required by law to hold Inland Revenue Forms
CIS124 for all Subcontractors who were engaged in Construction
Industry work at the University.
In those circumstances where we are not given this
certificate, we are legally obliged to deduct tax before any
payment is made to a Construction Company.
The University Contractor Reference, at the Inland Revenue, is
45640 90045001. Please note that this is not the same as the PAYE
Reference.
A Sub Contractor will fall into ONE of THREE
categories (CIS 4,5 and 6) determined by the Inland Revenue and
they MUST be in the possession of one the following
Construction Industry Scheme (CIS Cards).
The University is required to see evidence of one of these cards
before hiring any company/individual and before any payment is made
to them.
The holder of a CIS 4 Card
This is the Smaller Contractor, usually the "Odd Job Man",
self employed builder etc.
The University will raise a form CIS25, which is in
triplicate for each payment.
The University MUST deduct tax at the prevailing rate of 18%
2000/2001 and future years (23% 1999/2000) on the gross
amount, excluding any materials and VAT. The tax will be paid by
the Payroll Office to the Inland Revenue.
1 The Top Copy of the form will be sent to the Inland
Revenue by the Payroll Office.
2 The Second copy will be returned to the Sub Contractor by
the Payroll Office.
3 The Third copy will be retained by the Contractor (The
University - Payroll Office).
The Holder of a CIS 5 Card
This is normally the Large Contractor with turnover in
excess of £3 million per annum
subject to statutory revision. This Sub Contractor will have
already been identified as the
recipient of a CIS5 Card and will have already undergone a Turnover
Test with the
Inland Revenue.
The University will raise a form CIS23, which is in
duplicate..
1 The Top Copy of the form will be sent to the Inland
Revenue by the Payroll Office.
2 The Second copy will be retained by the Contractor (The
University - Payroll Office)
A Sub Contractor, who is the holder of a CIS 5 Card, does not
issue and does not receive a copy of form CIS23. The
Payroll Office, however, must be notified of all
invoice payments that are made to the holder of a CIS5 Card. The
Payroll Section will then raise a form CIS23.
The Holder of a CIS 6 Card
This is a Sub Contractor with a turnover of less than
£3 million per annum (subject
to statutory revision). See below for the larger Sub
Contractor.
The sub contractor should issue form CIS24 to the University
each time a payment is made to them.
For example, if a Sub Contractor renders invoices for monthly
payment, then we should be given a CIS24 each month.
When a Sub Contractor is paid in FULL at the END
of the job, then they should issue a CIS24 to coincide with the
period when that payment is made in full.
When a Sub Contractor is paid by INSTALMENTS, then they
should issue a CIS24 to coincide with the PAYMENT DATE of
each instalment.
The form given to us by the Sub Contractor is in triplicate and
this should be sent to the Payroll Office. Once it is has been
authorised it will be actioned as follows.
1 The Top Copy of the form will be sent to the Inland
Revenue by the Payroll Office..
2 The Second copy will be returned directly to the Sub
Contractor by the Payroll Office.
3 The Third copy will be retained by the Contractor (The
University - Payroll Office)
Informing staff within the University
Details of the e-mail addresses of any member of staff who is
connected with the
hiring/payment of Individuals/companies within the Construction
Industry should be
forwarded to Kevin Prior (Payroll Manager) in order that their name
can be added to
the e-mail distribution list.