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• # 102116
• Wed 15 Oct 2014 10:19 AM

What is the best way to account for CIS suffered using Sage?

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• # 102117
• Wed 15 Oct 2014 11:14 AM

Sage offer a CIS Add on, which takes care of all the posting requirements.  By linking sage to HMRC, you can also verify the subcontractors within Sage and produce the monthly returns for direct Submission to HMRC.

Edited at 15 Oct 2014 11:15 AM GMT

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• # 102206
• Sat 18 Oct 2014 10:22 AM

Hi Matthew

Firstly, Sage's CIS module will be of no help to you as it.only deals with paying and deducting cis tax from sub-contractors who work for you.

I deal with many thousands of pounds of cis suffered.  Much will depend on whether you are a sole trader or limited company, whether you operate a debtors ledger and also if you operate a paye scheme and (in sage) if you are registered for vat.

I can see how a 'dummy' bank account would work perfectly.  As I have a large debtor ledger I prefer to post a credit note to a separate nominal account for the tax paid.

• Anne P
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• # 102214
• Sat 18 Oct 2014 05:51 PM

Hi Matthew,

I agree with Anne P in the way she processes CIS.

I do the following:

Have a separate nominal code for CIS suffered and CIS that you deduct from subcontractors -

eg 2213 for CIS suffered and 2214 for CIS you deduct from subs.

I post the gross value of Labour (and materials if there are any) to the relevant nominal codes (depending if it is as a 'customer' or 'supplier'.

I then post a credit in the customer or supplier account for the CIS to the codes as stated above using a T9 tax code.

Having separate CIS nominal codes lets you check what you are due to HMRC or vice versa and makes it easier to reconcile at the end of every tax month.

Marilyn

• A clever person solves a problem.

  A wise person avoids it.

  Albert Enstein

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• # 102232
• Mon 20 Oct 2014 09:49 AM

Thank you all for your posts, they are all helpful. To be more specific, my client posts the Sage invoices (using the invoicing module) and the credit note for the CIS at the same time. The CIS suffered gets posted to NC2215.

What is the most simple way of knowing when the CIS suffered can be reclaimed?

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• # 102233
• Mon 20 Oct 2014 01:41 PM

Hi Matthew

CIS can seem very complex if you're not used to accounting in the construction industry.

IMHO

Personally I would not account for CIS deducted until payment is actually received and the value can be verified with the statement of deduction. There could be any number of reasons why it may not match the value on the invoice.  So your nominal account would show the value of the deductions made from each payment received and can be matched/reconciled to supporting payment certificates.

Reclaiming CIS suffered can be frustrating and depends upon the type of business.

if stole trader then he can reclaim on his SA return.

if a ltd company he can set off against any paye/nic liability for each tax period and it should be reported under RTI

if no paye or the value exceeds paye due, hmrc can usually refund or re-allocate it against any corporation tax due. However you have to specifically request this, and they are not quick to respond. Expect a wait of many months.

hope this helps

• Anne P
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• # 102235
• Mon 20 Oct 2014 02:06 PM

Hi Matthew,

I agree entirely with Anne P and her comments in the last post.

Marilyn

• A clever person solves a problem.

  A wise person avoids it.

  Albert Enstein

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