The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Sole trader working under cis
Post Info TOPIC: Sole trader working under cis
NA_AA


Guru

Status: Offline
Posts: 501
Date:
Sole trader working under cis
Permalink Closed

If a soletrader works under cis for another contractor - how would this income need to be treated in the sole-trader accounts?

 

Should it just be treated as a normal income? or would there need to be other adjustments need to be made



__________________

Thanks, Nadia.
kjmcculloch83


Expert

Status: Offline
Posts: 2085
Date:
Permalink Closed

I would show the total invoice and the payment as a split (70/80%) to the bank/cash and (20/30%) to a CIS debtors account.

Kris

__________________

BKN Most Innovative Accountancy Firm 2012

Director and Co-Founder of The Bookkeepers Alliance

 
NA_AA


Guru

Status: Offline
Posts: 501
Date:
Permalink Closed

This client is a subcontractor, therefore the tax is deducted by the contractor for whom they carry out the work for - therefore am confused as to how to account for it.



__________________

Thanks, Nadia.
RobRJBS


Senior Member

Status: Offline
Posts: 113
Date:
Permalink Closed

Following on from Kris, make sure your total sales are shown as the gross amount before CIS deductions, but they are sales just like any other.



__________________

Rob Director R & J Business Solutions (www.rjbusinesssolutions.co.uk) @RobRJBS
RobRJBS


Senior Member

Status: Offline
Posts: 113
Date:
Permalink Closed

I post the total sale as a normal invoice.

I then allocate the receipt to the invoice in the normal way leaving the CIS still outstanding.

I then post a receipt from a bank account named CIS account to clear the balance and account for the CIS deduction.



__________________

Rob Director R & J Business Solutions (www.rjbusinesssolutions.co.uk) @RobRJBS
RobRJBS


Senior Member

Status: Offline
Posts: 113
Date:
Permalink Closed

The CIS account will then be cleared by the accountant when the tax return is completed.

Let me know if you need more help with the tax return?

Sorry for 3 posts I just kept thinking of more to add!



__________________

Rob Director R & J Business Solutions (www.rjbusinesssolutions.co.uk) @RobRJBS
NA_AA


Guru

Status: Offline
Posts: 501
Date:
Permalink Closed

Thanks Rob



__________________

Thanks, Nadia.
kjmcculloch83


Expert

Status: Offline
Posts: 2085
Date:
Permalink Closed

That was much clearer than I was doing Rob.

Kris

__________________

BKN Most Innovative Accountancy Firm 2012

Director and Co-Founder of The Bookkeepers Alliance

 
NA_AA


Guru

Status: Offline
Posts: 501
Date:
Permalink Closed

Rob,

 

one last question - when setting up the cis account, should this be an asset or liability?



__________________

Thanks, Nadia.
kjmcculloch83


Expert

Status: Offline
Posts: 2085
Date:
Permalink Closed

It's an asset. You are owed the money, think of it as a tax prepayment.

Kris

__________________

BKN Most Innovative Accountancy Firm 2012

Director and Co-Founder of The Bookkeepers Alliance

 
NA_AA


Guru

Status: Offline
Posts: 501
Date:
Permalink Closed

an asset?

 

is this not the tax the subcontractor has paid which was a liability?



__________________

Thanks, Nadia.
kjmcculloch83


Expert

Status: Offline
Posts: 2085
Date:
Permalink Closed

No, the tax isn't due at this point. When the client submits his tax return at the year end it is used to pay the tax owed. The client then either makes up the difference or receives a refund from HMRC. Think of it the same way as a prepayment.

Kris

__________________

BKN Most Innovative Accountancy Firm 2012

Director and Co-Founder of The Bookkeepers Alliance

 
NA_AA


Guru

Status: Offline
Posts: 501
Date:
Permalink Closed

ok that is clear

therefore I should not provide a P&L (as this is what was requested) to the accountant, I should provide them with a TB

__________________

Thanks, Nadia.
RobRJBS


Senior Member

Status: Offline
Posts: 113
Date:
Permalink Closed

If you can I would always provide a TB along with the P&L.



__________________

Rob Director R & J Business Solutions (www.rjbusinesssolutions.co.uk) @RobRJBS
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Sole trader working under cis
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About