You can offset CIS deductions your client has suffered from the monthly PAYE & NIC payment. If you do this then you should CR Account 2212 (as set up by you) and DR the PAYE control account to reduce the liability
If the total CIS is greater than the PAYE & NIC due then you should notify the clients HMRC accounts office that no payment is due.
You will need to maintain this hmrc form too of all the deductions.
Please note that any repayment due if CIS suffered is > than the PAYE liability constantly wont be actioned till the P35 is done at the end of the year..
Hope that helps
Jeremy
-- Edited by GJRobbins on Monday 24th of September 2012 07:28:24 PM
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I have taken on a client who is a subcontractor that operates under CIS.
To account for the CIS deductions I am entering as follows:
1. Raise sales invoice to the customer for the full amount incl VAT
2. Enter the customer receipt in the bank (for the full amount incl VAT but less the CIS deduction)
3. Raise a sales credit to this customer with T9 tax code for the balance owing, ie the CIS amount, and coding this credit to 2212 (CIS Deduction code that I set up)
This then leaves a DR balance in the CIS n/c
Now I'm stuck!
What do I do when I come to pay PAYE?
Should I be doing something to CR the balance in the CIS n/c or do I just allow this to accumulate?
This is really driving me to the point of madness. When I took on the books, the CIS scheme wasn't really explained very well, and I am trying to start entering the transactions in a way that make sense, but can't quite work it out.
Any advice would be greatfully received - and please make it simple. I don't think my brain can take much more!!
