Managing CIS tax taken on sales invoices

Hi

I have been using the Quickfile workaround for the CIS tax deductions that are taken by our customers from sales invoiced payments. I need to use the CIS figures for my monthly tax return, which are submitted for the month in which they are paid. The problem is that the nominal account ‘CIS deductions’ records the deduction at the invoice date, not the paid date. I need to record the date paid so that I can allocate the deduction to the right month.

Can I use the following practice instead: mark the invoice as paid in full (without any CIS deduction); create a journal entry of the CIS deducted amount going from ‘general sales’ account to the ‘cis deductions’ account. This would then sit in the account, marked at the date taken, referenced to a particular customer and invoice???

Your help is greatly and urgently appreciated!!

HI

I have just realized that my suggestion will not work - when I tag a payment from the bank with a sales invoice it will not match if CIS has been deducted by the customer. This will leave an outstanding balance on the account; so my question is how to I mark this off whilst showing a CIS deduction?

apologies for the confusion.

bit of confusion in qution, if your customer are deducting CIS for you why do you have to submit monthly tax return?

when you create invoice for your customers in gross it will be
Dr Debtors
Cr Sales

on receipt of money
Dr Bank
Dr CIS deductions
Cr Debtors
you can off set this cis balance with paye liability if any if you are limited company
Dr PAYE liability
Cr CIS

if you have sub contractors as well for which you have to deduct CIS and submit monthly cis return then it will be
Dr Subcontractor exp
Cr CIS a/c
Cr bank

i hope it is of help

Hi

Yes, we are a limited company.

By ‘monthly tax return’, I am referring to the RTI submissions we make to HMRC, where our tax liabilities are offset by the CIS deducted from our sales.

Apologies, I am not an accountant, so I just wondered if you could present your solutions in non-accountant language?

Ok here is what you can do, create a new petty cash account called “CIS Control Account”. Once you created the sales invoice , just show in notes to invoice how much CIS is deductible (not line item). Go to CIS control a/c record receipt and allocate against this invoice you just created, then once you get net receipts from customer (after deducting CIS) allocate that against this invoice.

Your CIS control a/c will show how much you can off set against paye, end of do your normal paye journal and when it comes to paying paye, you can do one payment entry in CIS control a/c, allocate it as payment to HMRC (paye) and rest of balance in PAYE liability account can be paid off from main bank account

1 Like

Hello,

I need some help with the CIS too.

So far I understand:

when you create invoice for your customers in gross it will be
Dr Debtors
Cr Sales

on receipt of money
Dr Bank
Dr CIS deductions (so far I have been entering them as 1202 Proprietors Drawings Account)
Cr Debtors

If I am the person sub-contracted (I am a self employed too) what do I do next with the 1202 account? What happens to it?

Thank you

Excellent formula, just what I was looking for!

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