Construction Industry Scheme (CIS) and Payroll RTI


What is RTI ?

RTI stands for Real Time Information and is the biggest change to the PAYE system since its beginning in 1944, and from April 2013 changes the way that employers report information to HMRC.

Employers need to submit data electronically to HMRC every time that they pay their employees, rather than with their year end return.

RTI starts for most businesses from April 2013 and for all employers by October 2013; HMRC will write to employers to advise them when to start.

For more general information about Payroll RTI and What, When and How Returns Employers now have to submit, please see "What Next ?" below and then view the mentioned other Blog Posts. 

CIS ManSpecial Notes for Employers engaged in the Construction Industry Scheme (CIS) 

The monthly CIS300 contractor returns must continue to be completed and submitted as before RTI was introduced. Of course, the late filing penalties for missing the CIS300 due date also remain unchanged.

Limited Company Employers that have CIS Deductions taken from their own income must also now complete an Employment Payment Submission (EPS) under RTI.

So…under RTI, the monthly payment that must be made to the HMRC is calculated by adding the PAYE charge (from the Full Payment Submission (FPS)) to the CIS charge (taken from the CIS300 return) and then deducting any amounts shown on the Employment Payment Submission (EPS) return.

If there are any excess CIS deductions (ie. they are greater than the PAYE charges and CIS charges added together) , they would be carried forward each month until the end of the tax year. Limited Companies are unable to claim a repayment of these excess CIS Deductions until the final FPS has been submitted for the year, all amounts due to the HMRC for the tax year have been paid and the tax year in which the CIS deductions were made from the company has ended.

One last point is that if an EPS is submitted merely to report a Nil Return, then a CIS Monthly Return that reports a Nil Return would also be required.

Need Help ?

Staff at Harley Grove are fully accredited on Payroll RTI regulations and specifically on Sage Payroll. We offer one-to-one remote or face-to-face training on Sage Payroll and, of course, including RTI. 

WHAT NEXT ?

There have been 2 Blog Posts about Payroll RTI so far:

Is your Business Prepared for Payroll RTI ? Check it out here.

Payroll RTI Returns – What, When and How ? Check it out here.

Look out for the next Blog Post that will give more information about how RTI will make your Payroll Year End easier.

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