Completing the Contractor Tax Details (Payroll UK)

Contractor tax details apply to payees in the United Kingdom who are independent contractors who have their own business. This section requires completion if the payee type is Contractor, Deemed Contractor or CIS. The tax details of such payees can be viewed and updated in the Payroll > Payee > Payee Maintenance > Payee Entry > Contractor Tax Details section.

The contractor tax details must be recorded on the payee record before the payee record can be saved.
Once defined, a payee's contractor tax details can be modified if necessary so long as the payee is not currently included in an open pay batch.

Once the payee has been paid (included in a closed pay batch), the contractor payment terms are locked for the corresponding payee details validity period and cannot be modified for that period. If you need to modify contractor payment terms after the payee has been paid in one or more pay batches, you must create a new payee details validity period.

The remaining fields in this section can be edited for an existing validity period. However the changes will not be reflected in reports or payslips as this information is captured at the point of the pay batch close. If a contractor’s VAT registration status needs to be applied, this can be updated but any adjustment to VAT will need to be applied at the VAT stage of the pay batch.

If you require fields to be effective from a particular validity period, you can still enter a validity period with the change applied.

How to Record the Contractor Tax Details

To record a payee's contractor tax details, follow the procedure below.

How to Record the Contractor Tax Details
	If you do not have the relevant payee record open on in the Payee Entry screen, use the Payroll > Payee > Payee Maintenance screen to search for and open the relevant payee record.
2.	In the Payee Details section of the Payee Entry screen, scroll down the page to the Contractor Tax Details section. The Contractor Tax Details section is available only if the payee has a payee type of Contractor, Deemed Contractor, Umbrella, 3rd Tier Agency or CIS.
3.	If the payee's payee type is Contractor, Deemed Contractor or CIS, in the Company Name field, key in the name of the payee's company. If the payee's payee type is Umbrella or 3rd Tier Agency, select the supplier Company by clicking the ellipsis button next to the Company Name field to display a list of suppliers to select from. Once a supplier has been applied to a payee the details on the supplier will be inherited onto the payee and cannot be changed. When the supplied payee is processed in a pay batch the supplier cannot be changed.
4.	Enter the Company Registration Number. This is an optional field. If the following conditions are met for tax type CIS, this field is mandatory: Business Type = Partnership and Payee’s NI Number or Partner UTR Number is blank
5.	In the Business Name/Trading Name field, key in the registered trading name under which the payee's company operates. This may be the same as the company name. This field will be inherited from the supplier record and is read only in the payee screen where the payee type is Umbrella or 3rd Tier Agency.
6.	In the Business Type field, select the contractor's business type: Sole Trader, Limited Company or Partnership. This is used to identify the payee's engagement type for the Employment Intermediaries Report requirements. This field will be inherited from the supplier record and is read only in the payee screen where the payee type is Umbrella or 3rd Tier Agency.
7.	If the payee is VAT registered , click VAT Registered and key in the payee's VAT registration number. When checking the VAT Registered checkbox, this will then activate the calculation of VAT in the pay batch. This field will be inherited from the supplier record and is read only in the payee screen where the payee type is Umbrella or 3rd Tier Agency.
8.	If the payee is VAT registered, you can record the date they became VAT registered. This is an optional field for Contractor, CIS or Deemed Contractor payee types.
9.	If the payee has become de-registered for VAT, you can record the date they were de-registered in VAT De-Registration Date. This will not remove the existing VAT Registration status as a payee could become VAT registered again. This is an optional field for Contractor, CIS or Deemed Contractor payee types.
10.	In the UTR Number field, if the payee has provided their Unique Tax Reference number, this can be entered. If the following conditions are met for tax type CIS, this field is mandatory: Is Verified is Checked and Business Type is Sole Trader or Limited Company and Tax Treatment is Standard or No Tax
11.	If the business type is Partnership, the Partnership UTR number becomes available. The partnership UTR number may be different to the contractor's UTR number and when submitting a CIS300, if you have both UTR numbers, they must be included on the submission. If the following conditions are met for tax type CIS, this field is mandatory: Is Verified is Checked and Business Type is Partnership and Tax Treatment is Standard or No Tax
12.	If the payee type is Contractor, Deemed Contractor or CIS, enter the payee's business address. This field will be inherited from the supplier record and is read only in the payee screen where the payee type is Umbrella or 3rd Tier Agency.
13.	At the top of the Payee Entry screen, click Save. A confirmation message displays to indicate that the payee has been saved successfully.