A faulty air conditioning unit in one of HM Revenue & Customs (HMRC) data centres created havoc with the new Construction Industry Scheme (CIS), introduced last week.
Contractors were unable to verify the employment status of their sub-contractors online.
A HMRC spokesperson refuted suggestions that the problem was caused by defective CIS system software.
“Contrary to popular reports,” he said. “This was not due to a computer glitch – our IT systems were working perfectly.
“We had a problem with the temperature control in one of our data centres, and we had to switch some of the servers off.”
He explained that the problem, which emerged on Tuesday morning (April 10), was rectified by the afternoon. “There was no disruption to services.
Construction firms were still able to verify the status of their sub-contractors.
“The CIS help line was still available. We also had a contingency verification service available. Those firms concerned about how much tax etc they should deduct, we told to apply the 20 per cent rule,” he added.
The new CIS sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry and certain other businesses.
Under the new rules, which came into force on April 6, the registration card (CIS4) and tax certificates (CIS5/6) become obsolete.
Sub-contractors are now required to register their employment status with the HMRC, either by phone or online.