New Construction Industry Scheme (CIS)

Electronic Exchange

From 6th April 2007 H M Revenue and Customs (HMRC) are introducing a new CIS that replaces the Scheme that was started in August 1999. The new CIS provides an EDI submission service that will see the introduction of a verification service that replaces cards and certificates, and also replaces vouchers with monthly returns.

The ODEX product family provides your electronic connection to the CIS and can also integrate seamlessly with your internal systems. Files created by your payroll system can be picked up automatically by ODEX and sent to HMRC without the need for human intervention. ODEX can also be configured to connect automatically to HMRC and download new messages, which can then be extracted automatically to your internal system ready for you to import. If the messages produced by your internal system are not in the format required by the CIS, then our CIS accredited Xlate Evolution translation software can translate inbound or outbound files between your internal message format and the CIS message format.

ODEX can connect directly to the Inland Revenue using ISDN, or TCP/IP connections via a VAN. We recommend our DINET VAN for communications with the IR, as unlike some other VANs, DINET can handle both EDI and GFF format files and does not require any extra addressing information.

Benefits of using EDI

Using the new CIS will provide numerous benefits in a number of key areas:

Quality & Accuracy

EDI improves the quality of service as it enables information to go from one computer application to another without the need for manual intervention. This reduces the likelihood of errors that can occur as a result of re-keying data from paper forms.

Speed

Using EDI the process of transferring messages from your organisation to the CIS takes minutes, not days. Unlike paper submissions, messages that are exchanged via EDI are not dependent on other handling parties that can slow the message exchange. As EDI messages are forwarded automatically to the intended recipient, the risk of unforeseen delays normally associated with paper submissions is dramatically reduced.

Savings

Savings can be found in areas such as printing, paper storage and manpower (postroom, administration and data entry).

Flexibility

EDI submissions allow you to send data to HMRC when it suits you as there are no restrictions on the time of day when data can be sent (a deadline for monthly submission still applies).

How ODEX Works

The ODEX software solution provided by Data Interchange enables direct or indirect connectivity to HMRC and allows for the exchange of electronic information. ODEX supports a number of connection methods. However, direct connection to HMRC must use their preferred method of OFTP over ISDN, but connections via a VAN, such as DINET, support other connection methods such as OFTP over TCP/IP, AS2 or FTP.

Message Exchange Diagram

Figure: Message Exchange Examples

Files created by your internal systems can be picked up automatically by ODEX and sent to HMRC. When a connection is made, ODEX not only sends your message out, but also retrieves any files that have been sent to you. The files downloaded to your system can be extracted automatically and placed in a specified location ready for your internal system to import. If the files produced by your payroll system are not in the required CIS format, our accredited XLATE Evolution translator software can be used to translate the files into the correct format.

ODEX and XE scenario Diagram

Figure: ODEX and XE scenario

CIS Documents

The electronic link provided by the EBU supports the exchange of the following taxation documents:

CIS Transactions Direction Description
CIS300 Contractor to HMRC This message provides a complete return of all payments made in the preceding tax month to all subcontractors within a CIS Scheme.
CISREQ Contractor to HMRC The CISREQ message is used to send Subcontractor Verification Request information from the Contractor’s/Agent’s CIS system to the HM Revenue & Customs system.
CISREP HMRC to Contractor The CISREP message is used to send Subcontractor Verification information from the HM Revenue & Customs system to Contractors/Agents.