CIS suffered question

missmelmissmel Feels At HomePosts: 27Registered
I have run the reports for a builders VAT quarter and noticed that the sales value in Box 7 is lower than the VAT due in Box 1.
Having investigated it is because of CIS Suffered and being on cash accounting, builder uses Sage Instant and it can only take the value of sales paid - which is reduced by the 20% CIS deducted (done via credit note to a separate CIS nominal code)

Now do I submit the figures as per the Sage print
OR do I inflate Box 7 manually to the Nett value on the invoice?

I am assuming inflate Box 7 but will there be any issues / future problems with the values submitted to
HMRC not being the same as the reports held?

Comments

  • T.C.T.C. Experienced Mentor Posts: 1,448Registered, Tutor
    Sage and CIS don't seem very compatible! You will need the accurate figures from the invoice for HMRC.
  • PAMDILLPAMDILL Experienced Mentor Posts: 715Registered
    I have worked with CIS and Sage for years and years. I have found if you are not using the CIS Plug in then the best way to treat CIS deductions suffered is as follows, (this works for both cash VAT and accrual VAT)

    1. Enter sales invoice as normal, split labour and material so you do not get too much CIS deducted.
    2. When payment of invoice is received do following:-
    Enter payment into bank in Sage at full invoice amount.
    Enter credit note into sales ledger for customer using CIS nominal code (I use 2212) use VAT code of T9, this prevents it reducing sales in VAT Return
    Next refund credit note into bank account at same date as receipt was entered (this matches to receipt to make net receipt) use the reference CIS Deduct.

    I have had several VAT and CIS inspections and have had no complaints regarding processing this way.
  • missmelmissmel Feels At Home Posts: 27Registered
    I have been putting invoice on in full and then at the same time creating a credit note to 2213 (new code for CIS only). I've found I can't use T9 as Sage will not let me allocate different tax codes, so I just use the same tax code but enter 0 (zero) in the vat box.
    Then when payment comes in it is matched exactly and allocated.

    But this meant my Box 7 sales is less than it should be for the VAT being paid over in box 1!

    Pamdill - have you used this on Sage Instant?
    I have a memory of not being able to simply refund a credit note on Instant, but I'm going to give your method a try as it is basically what I am doing but without the reduced sales issue.

    JayB - I like your idea, I may well give that a go too

    Thanks
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