Forum Message

Full CIS

We are moving over to paying our CIS direct to HMRC instead of the deduction paid by clients.

How do we enter this onto the invoice to be attributed to the contract at the correct value (20% Labour) but representing the full value of any given project to the client.

Tony


Posted by A Soane on Feb 4, 2016 12:06 PM GMT

Hi Tony,

I'm not sure I understand. When your clients withheld the CIS deduction from payments, you could recover the money from HMRC. Are you saying that you now pay CIS deductions directly to HMRC and then later recover these deductions?

Regards,


Posted by Mark McLaren (Solar Accounts) on Feb 4, 2016 1:21 PM GMT

Hi Mark,

Currently we provide an invoice with CIS deducted @ the rate -20%, the client pays the nett amount to us and pays the attributed CIS to HMRC every month. Likewise we do this with our Sub contractors. We pay them their weekly labour invoices minus the CIS and every month we pay HMRC the accrued values for all Subcontractors. Some are at -20% (the more established) and some are at -30% (new tradesperson/not categorised/) We can and do set these


Posted by Tony Soane on Feb 4, 2016 2:04 PM GMT

Hi Tony,

Unfortunately you cannot use the CIS Deducted By Customers report in that case because it only includes invoices where the client makes the deduction. You will need to keep a separate record of which invoices are involved in direct payments to HMRC (you may want to add "direct CIS" to the Journal Memo for this purpose) and manually calculate the amount to add to your monthly return.

When you pay the money to HMRC record it in the same way as for the other types of CIS deductions (eg. a General Transaction between the Cheque Account and the Income Tax and NI Liability account).

Regards,


Posted by Mark McLaren (Solar Accounts) on Feb 4, 2016 2:05 PM GMT

Hi Tony,

I hope I have understood your post.
Your company is now classed as Gross Status and therefore when you carry out work as a subcontractor you will not have any CIS deducted from you by the Main contractor. In this case you will just invoice the Main contractor the full amount and they should pay you the full amount.
Might be an idea to notify all Main contractors that you are now Gross Status as they will have to 'verify' you again with HMRC - also put on your invoices that you are Gross Status for CIS Purposes.
Nothing will change where you act as Main contractor and you engage subcontractors - this will still be processed the same way in Solar and you will still be required to submit monthly info and payment to HMRC for these.


Posted by MM Bookkeeping Services on Feb 5, 2016 10:55 PM GMT