I need to post a subcontractors invoice to Sage Line 50 taking into account the 20% which will be paid to HMRC.
I have been paying CIS Subcontractors for years, we use to have the Sage CIS programme which automatically did this however I now need to do it manually as I have started a new company who unfortunatley only have the original Sage Line 50 programme.
Do I post the invoice in full to the subcontractor account then post a credit note to the same account to show the tax being deducted?
If I do this do I then need to post a dummy invoice to the hmrc account with the tax control nominal code which the hmrc payment can be allocated against?
If not is there another way this should be done?
Please help I am going crazy trying to figure it out
The simplest approach is to set up a control account for CIS tax (say 2230 or something like that), and then:
1) Post the invoice (in full, with the appropriate tax code) to the supplier ledger, going to the relevant expense code for the work supplied. 2) Post a credit note (as T9) to the supplier account, for the CIS deduction, going to the CIS tax control code.
The control code will build up a credit balance of CIS owed to HMRC, and the supplier accounts will always show the amount owed to the subcontractor net of the CIS tax (the invoice minus the credit).
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Yeah, that looks about right - other than the T9 on the invoice posting; if your company is VAT registered, that should probably be T0. (Using T9 on the credit is correct).
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
