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I need some Xero expert advise,please,using CIS Sales Invoice,showing the Running costs

taniaonisortaniaonisor MAAT, AAT Licensed Accountant Posts: 8
Hello,
Some Xero Expert advise,please.I am new to Xero,and new to have CIS Sales Invoice,showing Running cost uncharged Vat on, but I don't know which account code to use to record on Xero,is it treated as Revenue?Sorry,my silly questions,But I am trying to do the Annual Accounts today, but I asked Xero about it, they can't tell me exactly which code to use, they advise me is a revenue.My concerns are if I record it as Revenue,the Sales will increase, my client believing he can deduct running postpaid on invoice already as Expense.Can someone clarify this for me please,as how it will be shown on P&L,please,and the code, account to use on Xero.Thank you in advance, and sorry if I confused someone.

Comments

  • taniaonisortaniaonisor MAAT, AAT Licensed Accountant Posts: 8
    Hello,
    Anyone able to help, please.
    Thank you
  • douglasstrouddouglasstroud Registered Posts: 161
    What is a CIS invoice showing Running cost uncharged VAT on??
    If you can explain it better maybe somebody could help
    taniaonisor
  • taniaonisortaniaonisor MAAT, AAT Licensed Accountant Posts: 8
    Hello,
    Sorry about my writing.
    It meant to say CIS sales Invoice,from Contractor,showing Labour Income,but also showing Running costs(materials),charged VAT on both.
    My question is, how do you enter, show that in XERO ,in terms of what Account(from chart of accounts) to use for that Running costs, please.Have to be entered as it is described,because Vat was charged.My apologies,abou confusion, but I also asked Xero,not able to advise, this is why I am asking here, maybe someone have experience in Xero with this.Thank you in advance
  • douglasstrouddouglasstroud Registered Posts: 161
    So if I understand correctly you are doing the bookkeeping for the business who has issued the Invoice, is that right?
    I dont use XERO but this has nothing to do with the software this is simply the Business issuing an Invoice which should be classed as Sales, not sure what or where the problem is!
  • taniaonisortaniaonisor MAAT, AAT Licensed Accountant Posts: 8
    Hello,
    Thank you for your reply. Yes,It is classed as sales, but need to be split, show that line for materials, as you cannot deduct CIS from material, only from labour ,this is why it is confusing, because there are CIS charges on Labour,also VAT on Labour and Materials.Sorry,but even Hmrc,was confused, as I asked them Yesterday.That material shouldn't be shown there they say, but also, because Vat was charged.If anyone know or heard about it, please,advise.Thank you in advance.
  • douglasstrouddouglasstroud Registered Posts: 161
    Why does it need to be split?
    You record the gross of the invoice as sales and then the CIS deducted goes into the CIS suffered account and the net is what you receive
    Not sure what is confusing!
  • taniaonisortaniaonisor MAAT, AAT Licensed Accountant Posts: 8
    It shows the Gross sales total, you are right.
    The reason why is it split, is because the Total includes Labour and Materials, and you cannot deduct CIS 20% from materials, but you can deduct VAT on both. It will be ok, in terms of Vat ,to Record the Gross, as you say, but not for CIS.Sorry ,this is why is confusing.
    It looks like that:

    Labour cost xxx
    Material cost xxx
    Total xxx
    CIS 20% on labour (xxxx)
    Vat on Labour and Material xxxxx
    Total xxxxx


    Thank you.
  • douglasstrouddouglasstroud Registered Posts: 161
    Just because it is split between labour and materials does not alter the accounting transactions
    VAT charged on labour and materials goes to the VAT account
    Gross amount on Labour and Materials goes to Sales (before CIS deducted)
    CIS deducted on Labour goes to the CIS suffered account
    Amount paid goes to the bank

    Does that make sense now?
  • taniaonisortaniaonisor MAAT, AAT Licensed Accountant Posts: 8
    Thank you,
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