Although many contractors might find this extra paperwork arduous, today’s contractor software solutions take much of the hassle out of what would otherwise have involved lengthy phone calls to HMRC or switching between the HMRC website and your construction accounting software - putting you at risk of inaccurate data. .
In recent years, the government has announced certain changes to CIS. First, from April 2016 CIS returns could be made online only - HMRC stopped accepting paper forms. At the same time, HMRC introduced the ability to make amendments to CIS returns online, in addition to providing an online messaging and alerts system.
This April, more of your CIS admin needs to be done electronically.
It’s all to do with CIS verification (as opposed to returns). From April 2017, all CIS verification must be carried out online - the CIS verification telephone line will be closed.
This means that you’ll either have to use HMRC’s online service or CIS software to verify new subcontractors under the scheme.
What do I need to do?
If you already use software like Evolution or Evolution M to verify your subcontractors, and have the Online Verification Module installed, you can continue as usual. If you use (or occasionally use) the phone verification service, you’ll can only use HMRC’s web service or you’ll need to consider upgrading your software to include online verification functionality .
Although HMRC’s service is free to use, it does have its problems. Submitting information via this portal can be slow - you constantly need to switch between your accounting software, paper records, and your web browser. Essentially, you need to repopulate the online form with data that’s already in your software. This can lead to inaccurate data and problems later down the line.
Next, you’ll need to transfer the verification date, number, and the subcontractor’s tax status back into your accounting software.
The alternative is to use accounting software with an inbuilt CIS verification module such as Evolution M.
CIS verification made easy
Integrity Software’s Evolution and Evolution M let you verify CIS subcontractors directly through the software. You enter the details, the software checks them against HMRC’s records, and your records are populated with all verification info. It all takes only a few seconds per subcontractor.
Here’s a step-by-step guide for Evolution users:
- Go to Purchase Ledger -> Supplier Maintenance.
- Enter the subcontractor’s details, including name, address, trading name, and their UTR.
- Log-in to HMRC’s CIS service (within the same window), and click Verify.
- The software submits the data to HMRC.
- You receive confirmation that verification was successful.
- Your records are automatically populated with tax status, verification date and verification reference.
We’ve also created a short video here so that you can see just how easy it is to use.
Not only is this process significantly quicker than using HMRC’s service, it also drastically reduces the chance of errors slipping in. The only manual input is the initial subcontractor info you enter - everything else is done automatically.
In contrast, there are three chances for human error to occur if you use HMRC’s service: once when you input the data into your accounts, once when you send the data to HMRC, and again when you input the verification data back into your system.
In the future, we expect HMRC to continue to make further changes to CIS - whether to streamline the process or add extra requirements for contractors to follow.
Here at Integrity, we work constantly to update Evolution and Evolution M in-line with government legislation and guidelines. We strive to provide contractors with a system that eases the admin burden of legislation changes so that you can get on with more important tasks.
Find out more about how online CIS verification works in Evolution with our video guide.
If you want to add CIS Verification functionality to your Evolution software, contact us today on 03453 403040 or email us here.