CIS subcontractor invoices

Accounting
1

HELP :slight_smile:
I need to update CIS subcontractor invoices. I have followed the advice from this page CIS - Contractors which was very helpful.
However a few of the invoices include labour and materials (only labour is CIS liable) and I’m struggling to know how to accurately record these.
I’ll show an example so it’s clear why I’m struggling.
Total invoice amount £744.01 of which Labour is £600 and materials 144.01
Amount paid to subcontractor was £624.01 (which was £600 labour minus £120 CIS plus materials)

  1. How do I log the payment? Surely I can’t log in as paid in full to the CIS deductions bank account created as only part of it is CIS deductable.
  2. If logged as partically paid (which I have currently done) how do I then tag the payment when appears in the current account? As only part of it should be bank transfered to the CIS Deductions account as the other part paid off the materials
    At the moment if I put the full invoice amount into the CIS deductions account after completing all the advised procedures I would still be left with an amount (for materials) in that account unpaid.
    I hope this post hasn’t confused you as much as I’m confused right now, my brain feels like it might EXPLODE…
    Thanks for your time.
2

It’s no different - log the invoice as paid in full from the CIS deductions account (leaving it at -744.01) and tag the £624.02 out from your current account (when you pay the subcontractor) as a transfer to CIS deductions. This leaves the CIS account at -120, which is what you owe HMRC, and you can net it off with a £120 money in tagged to the PAYE liability code on your balance sheet, which in turn will net off when you pay the tax to HMRC.

1 Like
3

Feel like a complete plonker now, clearly been staring at this screen to long. Thank you.