I have been reading some of the threads here about how to deal with CIS on a computerised system. My query is a bit strange.
I am newly qualified but have been dealing with my husbands accounts manually (soon to move them onto Sage for his new financial year).
I have a CIS account (he is a sub-contractor) with a debit balance. I am not sure how I should be showing this on the balance sheet I have created, as it is not an asset his company hold (HMRC hold the funds) - should I show it as a reserve ? - but then I would need to show it going out again as I would not want to carry that figure over. Or should I show it as a current asset and show the outgoing in the current liabilities ?
The other option I thought of was to show on the P&L a section as CIS to be paid.
I am getting myself so confused with this one - I did ring ICB (as a practising member - although hubby is my only client so far!!) but they were not sure either.
Hope someone can understand what I am going on about and offer some advice.
From what I have read, you need to create a N/C 3150 in the capital/ reserves section + 2150 in current liabilities but it does seem not staright forward
Bill
-- Edited by Wella on Wednesday 28th of April 2010 02:43:43 PM
Thanks for that - I have read through it, which shows me how to deal with it for next year - once I've got him computerised (metaphorically of course !).
With a view to this years (manual) accounts, how do you think it best to deal with this debit balance on the CIS as I have it on the current assets at the moment which doesn't seem right !
Just to add, I am not if I read it correctly but I am sure I read somewhere that Sole Traders don't actually need a balance sheet - in which case I am fussing about nothing.
Ah, you have suggested this was a company Shirley, but you are right theer is no statutory legislation for a Balance Sheet to be prepared for a sole trader. To be honest I tend to just complete a tax return for these kinds of subbies and if they want accounts I'll normally just prepare an income & expenditure account. they never seem to have a business bank account and besides the accountancy accrual theer sis little to go on a balance sheet for them!
If you still wanted to have a balance sheet (ready for change over) I suppose you could use the Sage format and apply it to a manual double entry set of books.
It may be good practice for you too. Hopefully you will get other clients that may want you do the same.
I have used the ICB technical help once, and wasn't that impressed with the speed of response (I emailed a question), or the non commital answer.
