CIS Scheme for limited company (small business)

Kristy86
Kristy86 Registered Posts: 2
in General accounting discussion
Hello all. Recently I have set up a limited company for one subcontractor who works for the contractor in construction industry. I have registered the limited company for CIS Scheme, also I have got few subcontractors which I am paying them. I know how to deal with the invoice which I gave to contractor, but I am confused how can I treat in accounting the payments made to my subcontractor under CIS scheme, as wages or as cost of sales? and if I am director can I pay me in the same way how I paid mine subcontractors because I do work as well? Please, can I have the journal entries for the payments made. Thank you. I am confused with CIS scheme!

Answers

  • douglasstroud
    douglasstroud Registered Posts: 288 Dedicated contributor 🌟 🐵 🌟
    edited November 2018
    Hi
    Just to clarify, you have set yourself up as a Ltd Co and you have Sub-Contractors who do work for you and you are also under the CIS working for a Contractor?
    If the above is the case then you should be paying your Sub-Contractors with the gross amount showing as Cost of Sales but under the heading Sub-Contractor Costs,
    You as the director/shareholder of the Company will have to be paid as an employee using PAYE, by taking dividends or a bit of both.

    Who advised you to set up a Ltd Co ?

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