Payroll UK

Star Payroll Professional receives HMRC recognition for Construction Industry Scheme online services

Significantly ahead of April 2007 deadline

The Star Payroll Professional software has received its Recognition Letter from HM Revenue & Customs (HMRC) for online filing of returns and verification requests under the CIS (Construction Industry Scheme).  Star is also given this recognition on the HMRC website. This is official confirmation that Star Payroll Professional meets the requirements for online submission of monthly CIS returns (CIS 300) and verification requests over the internet, without the need for links to sales and purchase ledgers.

“From April 2007, employers will have to complete a verification procedure before paying a sub-contractor and the payments will be subject to specified tax rates. Employers will also be required to file their monthly CIS returns over the internet,” explains Carol Bradbury, Payroll Professional Product Manager.

Confusion seems to exist with some software vendors (including some household names) who are suggesting that payroll software alone cannot  be HMRC approved for CIS 2007 internet submission – and that CIS functionality needs to be linked with, or be part of, accounts payable finance software. This is not so. Star Payroll Professional meets all of the Construction Industry Scheme requirements, in line with the statutory changes to CIS. Star has completed the work well ahead of the release deadline of April 2007.

Star Payroll Professional controls the entire process. When setting up an individual’s record in Star Payroll Professional, there will be a choice as to whether the person has PAYE or sub-contractor status. In the case of a sub-contractor, a Unique Tax Reference is required and/or a National Insurance Number, before the payment amount can be entered. The record creation procedure automatically assigns an NT tax code and NI letter of X to the sub-contractor.

This means that sub-contractors and PAYE employees can be handled in the same datafile. This in turn means that employers can receive management reports that show sub-contractor and PAYE employee data both separately and combined

“All sub-contractor settings need to be verified with HRMC and the user is reminded of this as the record is being created. Once accepted, specific details of the trading status of the sub-contractor can be entered, such as sole trader, partnership, trust or company, together with associated information,” Bradbury adds

Verification of the sub-contractor can be done by telephone, manually on the HMRC website, or online by simply clicking on Star Payroll Professional’s Online Verification button and then stepping through the pages. Whichever method is used, the verification number and date is recorded and the appropriate tax is deducted on the next calculation.

Carol Bradbury finishes by saying: “Some clients have already had the opportunity to see and use the CIS 2007 software ahead of its release and have been unanimous in their approval and can’t wait to use it come April.”

“Star has included sub-contractor functionality in Payroll Professional for many years, so we see adapting the software to the new CIS regime as just part of the regular software update service that clients subscribe to,” comments David Blechner, Managing Director of Star Computers, who adds:, “The fact that other payroll software providers are either distancing themselves from the new regulations, or seem to be uncertain as to what they actually are, is a good business opportunity for Star as well as those payroll bureaux using Payroll Professional who are keen to take on clients needing to work with the new CIS system.”