Postings for CIS deductions???

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Situation...

Limited company who have 18% tax deducted by contractor. How would I make the postings on SAGE please??!! :?

Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???


    Don't know - but from 6th April it should be 20%

    Helen
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    I would make a special nominal code for it, then you know how much you are owed - and everything will balance nicely!

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    I'm not great with sage, but the way I do it with quickbooks is either add a line to the original invoice deducting the CIS and, as claudia says post that to a special CIS account, or else if you don't want it to show on the invoice then raise a credit note for it, again posting it to the CIS account.

    If you're then deducting these amounts from monthly/quarterly PAYE/NI/CIS payments then obviously post the deduction to the CIS account when you issue the cheque

    Jodie
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    Hi

    The way I post CIS deductions on sage is to open a supplier account for each sub contractor. I then post the gross amount of the invoice to sub contractor NL 6002 accounting for VAT if sub contractor is vat registered. Then post a credit note to NL 2215 (sub contractor tax deducted)use T9 for this transaction as you do not want this on vat return. The balance on the suppliers account will be the amount you pay to the sub contractor.

    It seems a bit long winded but I have found that this is the best method to control the tax deducted. It also means that you can use the sage reports to agree your year end figures.

    Hope this helps

    Val
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    The way I do it if I am the Subby having the 18%/20% deducted is to set up a bank account in the 1200 series. So when the Contractor pays an invoice I receipt the amount they have paid to my actual bank account and clear the rest off using the bank account I have set up for CIS by posting a Sales Receipt. I would then post a bank payment to the Subcontractor Tax due account in the 2000 series, which will clear the CIS bank account to zero. The 2000 - series account number will clear down when you deduct from your PAYE/NI monthly payments, if there are any.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    Thanks all for the advice, very much appreciated. :D
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    Thanks for the advice, am I right in presumming - from the advice given - that any tax deducted from payments ( my client is the subbie) can then be deducted from his PAYE payments to Inland Revenue for his employees? The company is a limited company with 2 directors. All payments received to them are subject to 18% deductions (in the past year).

    As this is my first subbie, I am still learning and any advice would be great. Its the Limited company bit that confuses me on this one! :roll:
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    Yes you can set off the deductions from the PAYE payments, but only for Limited companies.

    http://www.hmrc.gov.uk/new-cis/cis340.pdf

    See 1.15 on page 9 on the above link.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Postings for CIS deductions???

    Hi Sue,
    Thanks for that information, thanks god for ye wise ones on this site! really appreciate the advice. :D

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