Am stucked with CIS POSTING, the company I work for have an accountant who do the wages for us, and this is the first quarter that we have CIS tax involved.
Basically they sent us the TAX and National Insurance contribution for the last 3 months and the CIS Sub contractors Tax and the Suffered Tax is included in the sum.
I asked for a break down and they sent it via e-mail. But am stuck-ed as I am not sure where to posted it? Does the supplier sub contractor tax goes as payment to NC 2150.
And the customer main contractor goes as Receipt to NC 3150? even tho the suffered tax got deducted from the whole sum instead of getting a physical refund eg we didn't get a cheque or anything like that!!??
Sorry for going on, I hope all this makes sense to u guys and will be able to help..
I think it might depend on which chart of accounts was selected when Sage was set up. The one I use has separate nominal codes for Sub-contractors Creditor (2101) and Sub-contractors Tax (2250).
I'm not sure of you're set up but when I post the journal I
Dr Sub-Contractors (6002) - (gross pay)
Cr Sub Contractor creditor (2101) - net monies due to sub contractor
Cr Sub Contractor Tax Due (2250) - cis deducted.
Sorry, but I don't quite follow the "receipt" posting but hope the first part helps a little.
__________________
Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
My set up is Supplier sub contractor NC 6002 CIS NC 2150
Customer contractor NC 4000 CIS NC 3150
I post the invoices as normal then post the CIS TAX as credit to 2150 example, then end of the 3 months the accountant sent us the balance what we have to pay to HM Revenue as a lump sum, so I don't post a journal, just post it as BP.
Well saying that, am all new to this CIS business so not sure what to do for the best really.
The receipt posting I mention earlier is that of suffered Tax, under NC 3150 there is debit showing as we get that money deducted from a main contractor, so because we get the SUFFERED TAX back from HM Revenue, that has to be paid off against that NC right?!!
Sorry, I can't find any easy way to explain all of it!!
Assuming they are then it looks like they are offsetting CIS deducted from "Sales" against CIS deducted "from" their contractors which results in a net repayment from HMRC? If that's the case then I think it's easier to route both aspects of CIS to the same nominal e.g. 2150, so the CIS deducted from earnings will be a DR and CIS withheld from payments to subbies will be a CR.
Ignoring PAYE / NI then the repayment each period would contra the control account 2150.
Otherwise you'll need to do a journal each period end.
Dr 2150 with cis deducted from sales Cr 3150
hth
__________________
Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Where a company is both a contractor and a sub contractor, (unless they receive their payments as sub contractors from contractors (customers) gross) they will have 20% deducted from the payment (CIS suffered). If they also use subcontractors then a deduction 20% is made from the payments they make to their subbies. The CIS taken from the Subbies is paid to HMRC each month (or quater) along with PAYE (if operating paye) The CIS sufferred can be set off against the payment to HMRC, effectively netting off the amount. However you will not automatically get a refund if the CIS sufferred exceeds the PAYE plus CIS due to be paid. I believe it has to be reclaimed directly from HMRC at the year end (I do stand to be corrected on this though) your accountant would be able to advise.
Where an individual suffers CIS deductions (for instance your subbies) they would show the CIS deduction on their self assesment tax return (its a form of tax paid on account).
So far as Sage is concerned, it doesn't really matter which nominal codes you utilise so long as they are meaningful to you. At some point - probably monthly or quarterly -I suggest you consolodate into one HMRC liability account so thay the balance matches the payment to HMRC
Hello there, yes we are both contractor and a sub contractor, on the 3150 there is showing debit, so the only way I can see it that the money that we suffered from CIS TAX should be paid as BP receipt as even tho that £700 got deducted from CIS SUBIES is in a way a refund!!??
On the 2150 is showing credit so am guessing the payment that we made to HM revenue should go as BP to 2150?
being the amount of CIS tax deducted from Sales and offset against the payment to HMRC.
That way when you make a payment to HMRC you enter a BP against nominal 2150. Add the payment to the journal above and then both accounts will be zero, assuming you haven't posted the following months entries.
-- Edited by ADAS on Thursday 5th of May 2011 04:33:20 PM
__________________
Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
