CIS scheme and Quickbooks

JJH1969

I have started working for a client who has Quickbooks and also CIS subcontractors. Some are being paid through payroll and some via purchase invoice. What is the best way to treat CIS subcontractors in Quickbooks - hope someone out there is an expert!

Gem7321

Well first of all if they're being paid through payroll they are not subcontractors!

Normally I set up a dummy bank account called CIS deductions. Then when purchase invoice is paid net of CIS I use the dummy CIS bank account to clear the remaining balance on the invoice (the CIS element).

stevo5678

Subbies can actually be paid via the payroll as it doesn't mean they are employees. Businesses do it this way all the time as they need to pay over the CIS tax they stop as part of their PAYE liability to HMRC along with PAYE/NI from staff. The payroll summary clearly indicates who are staff and who are subbies with deduction.

This depends which way round you are talking but for subbies you can set them up as creditors and post the gross amount before deduction as an invoice. The net will be paid off against this from the bank account. You then issue a credit against the balance (the tax) and post the other side to a CIS due code maybe 2215.

The other option which I prefer is to enter it as and when you pay it. So say you owe £80 to a subbie net of CIS, enter the BP as £80 but enter the net amount as £100. This will throw up a contra entry of £20 to credit somewhere. Simply credit this to the CIS due code on the balance sheet. (which you can set up).

So entries would be CR bank £80, DR sub-con (P&L) £100, CR CIS Due £20 (B/S).

This can work with VAT being involved as well (Probably charged to customers).

All the above applies for customers as well.

Hope this helps. I know it works as we have used both ways for several clients.