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This document describes the CIS Tax reform toolbox developed by Information Systems Associates (ISA) to automate Contractors’ administration of the new CIS scheme.

ISA CIS Tax Reform Toolbox

The ISA CIS Tax Reform Toolbox provides the key functionality which allows Contractors to conform to CIS Tax Reform Rules which come into force on 6 April 2007. By providing an electronic interface to the HMRC (Inland Revenue), it significantly increases efficiency of administering these rules.

The toolbox has components which address all the key requirements of the legislation:

• It allows contractors to electronically send information on subcontractor payments to the HMRC (the Monthly Report) via the Government Gateway, and to receive and distribute replies on their success.
• It supports the production of the Payment Statements to Subcontractors.
• It complies with the HMRC Encryption standards.
• It generates the IR Mark required by HMRC.
• It supports electronic verification of subcontractors.
• It provides support to compare the CIS333 disk of registered subcontractors, sent by HMRC, with the Contractors existing database of subcontractors so that mismatches can be found and addressed.
• It is modular and can be used at many different points in existing processes in the Contractor, thus providing a flexible solution suitable for Contractors of all sizes.

What is the CIS Tax Reform All About?

Briefly, the goal of CIS Tax Reforms is to simplify the previous system of paper certificates which was somewhat cumbersome for both Contractor and the HMRC to manage. Instead, an electronic method of verifying the identity and tax rate of subcontractors is provided by the HMRC. Once subcontractors are verified, a Contractor can then use HMRC electronic facilities to submit a Monthly Report of payments made to subcontractors.

In order provide additional flexibility, it is possible within the system, for Contractors to pay subcontractors who are not verified. In this case however, they are taxed at the maximum rate, so it is in the interest of the subcontractor himself to register with the HMRC.

• CIS 340 & Factsheets
  This link provides Background Information, Guidance & Factsheets for the new CIS Reform Scheme
• Frequently asked questions (PDF 139K)

General information

There are a number of different components in the CIS Tax Reform Toolbox. A simplified version of the architecture is shown below. The components of the toolbox interface with existing systems which deal with Subcontractor payment information (shown in yellow).

The components in white are part of the client-side of the application – nearer to your existing Subcontractor database. The components in green reside on the Gateway server, (normally Windows 2003 with SQL Server 2005) which can handle input from multiple clients.

Gateway Client Application
The Gateway Client Application provides the user interface that allows the Contractor to select and send payment details for the Monthly Report to the HMRC. The application also allows the verification and matching of subcontractor details against the HMRC’s subcontractor records and to produce the monthly Payment Statement. Various options for manual recording of verification information are also present.

The Gateway Client Application obtains the basic information to be sent to the HMRC from stored procedures which are customised to the Contractors existing database.

The application runs on Windows 2000 and Windows XP.

Gateway Server Web service
The Gateway Server Web Service is the interface between the Client Application(s) and the Contractor’s central Gateway Service. It receives requests from the client applications and transfers these requests to the Gateway Service database where they queue for processing by the Gateway Service.

Gateway Server Service
This is the key part of the system that communicates with the HMRC CIS web site. It processes messages placed in its database by the Gateway Server Web Service, handling the communication protocol with the HMRC. Return information is stored in the Gateway Service database, and relevant items are sent back to the Contractor Subcontractor database via the Gateway Client Web Service.

Gateway Client Web Service
The Gateway Client Web Service updates the Contractor’s Subcontractor database with reply and receipt information returned from the HMRC. The Gateway service uses this to communicate with the Subcontractor system.

Data Migration Tool (Mig23)
The data migration tool allows the Contractor to prepare their existing data for the change over to new CIS procedures. This tool requires the data from the CIS333 CD which will have been sent by the HMRC. The tool stores transformation data in working database so that the live database does not have to be directly updated until the Contractor is ready to go live with the new system.

Customisation Services
The ISA CIS Tax Reform Toolbox provides a host of facilities to convert existing systems into an efficient tool to handle payments to subcontractors.

To do this, the toolbox provides a number of different interfaces. Normally, the fastest and most efficient way to get best value from the Toolbox is to commission the services of Information Systems Associates Ltd to guide and assist in the production of the interfaces, most of which are stored procedures.

Other Services to the Construction Industry

Information Systems Associates Ltd has a number of other tools which can add value to the construction industry. For example, we have developed tools for mobile, on-site data collection: one for Snagging and one for Time and Motion analysis.

These are built from our Data mobility product, ISAQuest, which is a generic and highly flexible tool for mobile data collection in the field. With ISAQuest, the creation of custom questionnaires or forms, together with electronic distribution of tasks to field personnel is straightforward. At the end of the process, electronic collection of data from these questionnaires and forms feeds straight into your existing backend systems.

These tools provide considerable scope to increase efficiency in the back office, making data delivery faster, more accurate and requiring much less manual intervention.