Hi there, would appreciate some help on the best way to record purchase invoices with CIS taken off and sales invoices with CIS taken off regarding quickbooks please, and then recording of payments and receipts, as I have just got a new client who this applies too, easy step by step points would be appreciated, many thanks
Hi Julie, This is actually quite simple and the way I do is this:-
Sales: You need to record the FULL value of the sale in the income account CR Sales £1000 Then, the amount you are going to receive from the customer DR A/R £800 or Bank/Cash if paid straight away Record the CIS suffered DR CIS Suff £200
Purchases: Record the full cost of the subcontractor to Cost of Sales DR CoS £400 Record the amount you will are going to pay them CR A/P £320 or Bank/Cash if paid straight away The CIS deducted (payable to HMRC) CR CIS Ded £80
I usually record the purchase invoice through Accounts Payable and obviously have the CIS code set up. I also have the CIS codes in the same place on the Balance Sheet which allows for easy viewing; technically, they should be in the debtors section as the net is an amount owed to the company and in the case of my clients, they are operating CIS132 so nothing needs to be paid to HMRC.
Hope this helps but if you need any further clarification, please let me know.
Hi David, thanks for your help and advise, how would you actually receive the money in quick books and pay the money out i.e via customer payment, etc.. sorry I am new to quickbooks and my new clients seems to have got themselves into a real mess. Thanks
Hi Julie, Are you referring to making the payment to HMRC? If so, I do a journal to CR Bank and DR CIS Deducted. The amount in CIS Suffered, stays on the BS and is an overpayment on tax which can be offset against Corporation Tax (if they're a Ltd company).
