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Marios


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CIS registered Invoices - Monthly Return
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Good afternoon everyone and I hope you're all enjoying the good weather 

We are operating as contractors and we deal both we companies and just labour contractors. Labour contractors are very easy and straight forward to deal with.

Occasionally a company provides both material and labour. And further on they require deposit up front. How to deal with this. Do I include all payments in the monthly return of the month the final payment takes place or do I treat every payment individually? And how does the material part affect the procedure?

All help welcomehmm

 



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Cheshire


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Is this your own business Marios?

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Marios


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Oh no, not there yet

 



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Cheshire


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Hi Try this https://www.gov.uk/government/publications/construction-industry-scheme-cis-340/construction-industry-scheme-a-guide-for-contractors-and-subcontractors-cis-340



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Marios


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Good morning,

Thank you for the suggestionsmile I've read that through and through.

I phoned them up and they said that payments need to be shown in the month they are actually made.

How the materials and labour need to be split in the two payments they left it a bit in the air.

So I guess logically the materials would be covered by the deposit and the labour by the final payment, as they would need to be paid for first. 

Problem solvedsmile

 



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Cheshire


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Hi
You should never assume in this business. Why are you paying them a deposit? I have worked with contractors who would just never do that, but it get that some will. What is the deposit actually for? This needs pinning down for each of them on an individual basis and needs something between the parties in writing. An email will suffice, it's just something to prove to HMRC that you are doing things correctly in the event of an inspection. This also needs to clearly state the terms of any deposit refund, eg in the event the subbie just walks off the job in a huff as we know they do occasionally. In that event the deposit may need to cover a portion of materials and a portion of labour completed to date, at which point you would need to reverse a portion from the materials to labour, report and pay the CIS.

Be careful believing the first line responders who answer the hones at HMRC, they have no clue often, although have to say CIS are usually the best department by far, plus have the best guide.

Hth

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
Marios


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Good morning,

And thank yousmile So by the looks of it we need to set up a thorough procedure from verification to CIS paid.

I have not much exposure to HMRC but CIS helpline have been helpful. 

Thanks again, have a lovely daysmile



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pictures


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The sub contractor needs to issue you a pro-forma invoice for the "deposit" and the invoice needs to give a breakdown of labour and materials. You need to declare all payments made up to the 5th of each month in your monthly return. The pro forma should be followed up by a proper invoice once they have received your deposit.

I have a strict policy now that unless the subbie shows a clear breakdown of labour and materials on their invoice it all gets entered as labour and tax deducted according to their CIS status (I am nice and phone new subbies up to explain this especially if they are new to CIS)

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Julie
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Sadly many companies have been bitten too often by Main Contractors and ended up ordering expensive materials only for the Main Contractor to go bump and never pay them. Hence many smaller contractors/subbies are now asking for payment up front for a proportion of the materials.

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Julie
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pictures wrote:

The sub contractor needs to issue you a pro-forma invoice for the "deposit" and the invoice needs to give a breakdown of labour and materials. You need to declare all payments made up to the 5th of each month in your monthly return. The pro forma should be followed up by a proper invoice once they have received your deposit.

I have a strict policy now that unless the subbie shows a clear breakdown of labour and materials on their invoice it all gets entered as labour and tax deducted according to their CIS status (I am nice and phone new subbies up to explain this especially if they are new to CIS)

 

Getting any kind of invoice from some of them is near on  impossible - even if you kidnap their grandmothers/girlfiends/car/van/ tools/beer and threaten not to return them unless they do!  The minute you make one single payment without an invoice - you are doomed!!!!!!



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
pictures


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I find hotels & b & b's the worst for that (except good old Premier Inn & Travelodge)



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Julie
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