NOTE: If the supplier record already exists, continue to the section, To add a subcontractor's CIS details.

1. Click Subcontractors then click New.
2. Enter the Subcontractor details as appropriate then click Save.

1. In the Supplier Record click the CIS tab and click Add CIS subcontractor details.
2. Complete the CIS tab as follows:
   
   
   Business Type

   Business type	From the drop-down list, choose the description for the subcontractor's business from the following: Company Partnership Sole trader Trust This selection determines which other fields are available for completion on the record.
   Partnership name	If the Business type is set to Partnership, enter the partnership name here.
   Partnership UTR	If the Business type is set to Partnership, enter the partnership's unique tax reference here. This reference is provided by HM Revenue & Customs (HMRC). The UTR was previously shown on CIS 4/5/6 documentation.

   
   

   Subcontractor Details

   Trading name	Enter the subcontractor's trading name here. This box may be left blank if the first, second and surname boxes have been completed.
   Legal name	Enter the legal name of the subcontractor's business here. The legal name is the name the subcontractor has used to register with Companies House as a limited company, or their trading name.
   Use the legal name in reports	Select this checkbox to ensure the subcontractor's legal name is output on reports.
   First name or initial	Enter the subcontractor's first name or initial here. If you enter a trading name then this box may be blank.
   Second name	If the subcontractor uses a second name or middle name, enter it here. If you enter a trading name then this box may be blank.
   Surname	Enter the subcontractor's surname here. If you enter a trading name then this box may be blank.

   
   

   References

   UTR	Enter the subcontractor's Unique Tax Reference here. This reference is provided by HM Revenue & Customs (HMRC). The UTR was previously shown on CIS 4/5/6 documentation. In the case of Partnerships the Partner UTR is requested. To check the validation of a UTR, go to http://www.hmrc.gov.uk/tools/payinghmrc/sa.htm and enter the UTR number in to the Self Assessment reference checker.
   NINO	Enter the subcontractors National Insurance Number here. If the number is temporary, or not known, please leave this box blank. The National Insurance number must be valid, there are certain formats which are invalid, for more information about this please refer to HMRC's website at http://www.hmrc.gov.uk/manuals/nimmanual/nim39110.htm
   Company reg. no	If the subcontractor is registered as a limited company with Companies House, enter their company registration number here.

   
   

   Verification Status

   Status	This box indicates whether the subcontractor is verified with HMRC. The status is initially set to Pending verification. If you verify the subcontractor's details using the Verify Now option then the box is automatically updated to Verified with HMRC. If you have manually verified the subcontractor then, from the drop-down list, choose Verified with HMRC. It may not be necessary to verify certain subcontractors, in which case you can choose Not required. In this situation, please refer to HMRC. If you have selected Not required then the Pre-2007 information details must be completed.
   Verification number	If you use the Verify Now option to verify the subcontractor then the verification number supplied by HMRC appears here for you. If you have manually verified the subcontractor then enter the number you were given.
   Last verified	This is the date that the subcontractor was last verified with HMRC. If you use the Verify Now option, this box updates automatically.
   Verify Now	To verify your subcontractor with HMRC online, click Verify Now.
   Tax Treatment	This indicates the tax rate applied to the subcontractor's payments. If you use the Verify Now option, this box updates automatically with the appropriate rate from HMRC. If you verify your subcontractors manually, to enter and edit the rate, click Tax Treatment.

   
   

   Payment Details

   Payment frequency	To record how frequently you pay your subcontractors, from the drop-down list, choose Monthly or Weekly.
   Agreement to send monthly statements by email	If the subcontractor has agreed to receive their monthly deductions statement by email, select this check box. If you select this check box, you must enter an email address for the subcontractor on the Details tab of this record.
   Agreement to pay a third party	If your subcontractor has agreed to be paid via a third party, select this check box, then from the drop-down list, choose the supplier acting as the third party. If the third party is not in the CIS subcontractor list you must create a new subcontractor record for them.

   
   Pre-2007 Information

   
   If you worked with this subcontractor before the 2007 CIS reform, to add their historical details, click Record pre-2007 information. Pre 2007 information must be recorded on subcontractor records with a Verification Status of Not required.

   CIS type	From the drop-down list, choose CIS4 , CIS5, CIS6 or exempt depending upon the type of tax certification held by that subcontractor before April 2007.
   Reg. Card/Cert ?	From the drop-down list, choose CIS 4(P), CIS4 (T), CIS5, CIS5 (Partner) or CIS6 depending upon the type of card/certificate held by the subcontractor before April 2007.
   Reg. Card/Cert no	Enter the subcontractor's card or certificate number here.
   Valid from	Enter the Valid from date on the subcontractors card or certificate here.
   Valid to	Enter the Valid to date on the subcontractor's card or certificate here.

   
   
   
3. Click Save.

If a subcontractor hasn't worked for a contractor before, or in the previous two tax years, then it is the contractor's responsibility to check with HMRC to see if the subcontractor is registered for the new CIS scheme. The verification process determines if the subcontractor should be paid gross or with deductions. From April 2017, most businesses must verify their subcontractors online.

1. Click Subcontractors then click Verify.
   
   If you highlight subcontractors before you click verify, only those highlighted subcontractors appear.
   
   
2. Select the subcontractors you want to verify then click Next.
   
   The Check Data window indicates if problems have been found in the data.
   • If problems have been found, to investigate further click Details.
   • To remove a subcontractor from the verification click Verify later.
     
     
3. If there are no problems in the data, to continue with the verification click Next then click Continue.
4. Check that your user ID and company details are correct then click Submit.
   
   Sage 50 CIS prepares and submits the information to HMRC. This may take some time depending upon how busy the Government Gateway is and the speed of your internet connection.
   
   You can't use Sage 50 CIS during the verification process.
   
   
5. To view details of the submission click the link provided.
6. To close the Internet Submission Wizard click Close.
7. Check the results of the submission and check that a tax rate has been applied to each verified subcontractor.
8. To complete the verification click Finish.
   
   If the submission isn't successful, a submission failure message appears. To view the details of the failure click the link provided. Before attempting to submit the information again, you must correct the problems identified in the Submissions Log.

1. Click Subcontractors then click Batch invoice.
2. Complete the Batch Subcontractor Invoices window. You can enter each invoice as one item per line, or if you want to post all the items on the invoice to the same nominal code and have the same tax code, you can post the invoice as one line.

   A/C	Enter the subcontractor's account code, or press the F4 function key then choose the required subcontractor.
   Date	The current program date is automatically entered, if required change this to the invoice date. If you've lots of invoices to enter, all with the same date, you can set the program date to the date required. To do this click Settings then click Change Program Date. Amend the date as required then click OK.
   Ref	If required, enter a reference that will help you to trace the invoice. This is the reference that appears on your reports.
   Ex. ref	If required, enter an additional reference.
   N/C	This is the nominal code to which the net value of this invoice is to be posted. The nominal code used determines whether CIS tax is to be applied to that line. For example, Nominal Code 6000 is the default code for Labour and subsequently attracts the relevant tax treatment on the payment of the invoice.
   Department	The subcontractor's default department automatically appears. If required, to amend this enter the department number directly, click the Finder button or press the F4 function key to search and select the department you need.
   Project Ref	You can enter the project you are incurring the cost against.
   Cost Code	If you have entered a project ref, you need to enter the cost code to which the invoice relates for example, Labour.
   Details	You can enter any text, up to 60 characters, to identify the invoice entry.
   Net	In this box, enter the net amount of the invoice. Alternatively, you can enter the gross amount, enter the required tax code then press the F9 function key, or click Calc.Net. Sage Accounts then splits the value and places the net amount here and the VAT amount in the VAT box. The VAT is calculated using the tax code in the T/C box. To access the currency calculator from this box, press the F5 function key.
   T/C	The default tax code for this subcontractor appears automatically. If required, you can enter any of the other tax codes as defined in your VAT rate table.
   VAT	This box displays the amount of VAT calculated, by applying the tax code entered, to the net amount in the Net box. You can change the amount shown at this point, if necessary.

3. If you have another item to enter, to move onto a new line and press the TAB key then repeat the process.
   
   To copy the information in the box above press F6. To copy the box above and increment it by one press Shift and F6.
   
   If you calculated the batch totals manually before you entered them into Sage Accounts, check your batch totals against those on the Batch Subcontractor Invoices window.
   
   
4. Click Save then click Close.

You've now posted a Batch Subcontractor Invoice.

1. Click Bank accounts then click Supplier payment.
2. Click the Payee drop-down list and click the required subcontractor.
3. Enter the required Date and select the relevant invoice line then click Pay in Full.
   
   You cannot enter part payments against subcontractor invoices.
4. Click Save then click Close.
If you get the message, 'Payments cannot be made to this subcontractor on the chosen date as they have no recorded tax treatment. To get the tax treatment, the subcontractor must be verified with HMRC', you must amend your tax treatment dates, open the subcontractors record and click 

To allocate payments and credit notes on subcontractors

If you have credit notes or payments on account on a subcontractor record, when you choose the subcontractor in the Supplier Payment window you may get the following options:

• Pay invoices only
• Pay & Allocate standard transactions
• Allocate CIS Taxable credits
• Allocate CIS Gross credits

Payments on account

You cannot allocate payments on account to invoices which are subject to CIS tax. This is because the payment would need to be a reduced value to post the credit note for the CIS tax.

If you have a payment on account you want to allocate to a CIS labour invoice, you must delete it or refund it and post it as a purchase payment. If the payment on account is for more than the purchase invoice, post the remaining value separately as a payment on account.

NOTE: On VAT Cash Accounting if the payment has been VAT reconciled you must refund it.

If you choose to refund the transaction you may want to do this through a contra bank account so it doesn't affect the bank reconciliation. You must post the refund and the new payment through this bank account and then transfer the difference to the main bank account. For example, if the refund is £100 and the new payment to pay the invoice in full is £200, post both through the contra bank account and then transfer £100 to the main bank account.

NOTE: If the payment has been bank reconciled and you delete this and post the purchase payment you must reconcile the new purchase payment. For more information about refunds, read more >

Part payments

You cannot post part payments against CIS labour invoices. To record items where the subcontractor invoice is part paid, we recommend that you delete the existing invoice and post the invoice as two or more batch invoices.

For example, one batch invoice for the amount to be paid first and a second batch invoice for the retention amount which is paid later. The separate invoices can be paid in full at the appropriate time.

For more information about how to delete transactions, read more >

Use this option to pay CIS invoices.

1. Select Pay invoices only then click OK.
2. Click on the required invoice click in the Payment column and click Pay in Full.

   If the invoice is subject to CIS tax, the payment value is reduced and the CIS Tax column shows the amount of tax deducted.

3. Click Save then click Close.

Use this option to pay and allocate transactions which are not related to CIS.

1. Click Pay & Allocate standard transactions then click OK.
2. Click in the Payment column and enter the required values.

   To allocate a credit note to an invoice in the Payment column on the credit note enter the required value to allocate.

3. Click Save then click Close.

Use this option to allocate CIS credit notes to CIS invoices which are not subject to CIS tax. For example, CIS materials.

1. Click Allocate CIS Gross credits then click OK.
2. Click in the Payment column on the invoice and the credit note and enter the amount you want to allocate.
3. Click Save then click Close.

1. Click Subcontractors then click CIS Return.
   
   
2. Click the View subcontractor payments for the month ending drop-down list and choose the appropriate month ending date.
3. Check the list of subcontractors and their deductions.
   
   These values do not include VAT.
   
   To view the transactions that make up the totals by subcontractor, double-click the relevant subcontractor in the list.
   
   If you need to make amendments or corrections then to exit the return without saving click Close.

You've successfully generated and checked your monthly return and must now submit the information to HMRC.

1. Once you've generated your monthly CIS return, to submit your return to HMRC click Submit Online.
2. Click OK then click Continue.
3. Check that your User ID and Company Details are correct then click Submit.
   
   The submission may take some time depending upon how busy the Government Gateway is and the speed of your internet connection. Sage 50 Accounts CIS cannot be used while this process is ongoing.
   
   If problems are found during the submission, a message appears. To view details of the errors, click More info. Read more >
   
   
4. To view the details of the submission click Click here.
   
   If the submission has not been successful a submission failure message appears. To view the details of the failure, click the link provided. The submissions Log window appears. Before attempting to submit your return again you must correct the data problems identified in the log. For more information about how to resolve any errors during a submission, read more >
   
   
5. Click Close.

You've now successfully submitted you monthly CIS return to HMRC via the Government Gateway. This also posts journals to move the value from the CIS Tax Control nominal code to the CIS Tax Liability nominal code.

If you submit your CIS Return outside of Sage 50 Accounts, for example, via the HMRC website, you must record this as submitted in Sage 50 Accounts.

1. Click Subcontractors then click CIS Return.
2. Click the View subcontractor payments for the month ending drop-down list and choose the relevant date.
3. Click Other Submission Method and select the required option then click OK.

The Other Submission Method option is only available if your computer date is on or after the 20th of the month selected. For example, if you've submitted the month ending 05/07/2013 manually, the Other Submission Method option is only available if your computer date is on or after 20/07/2013.

1. Click Subcontractors then click Archives.
2. Click the Year drop-down list and choose the required year.
3. Click the required month then click Open Report.
4. To print the report click File then click Print, or to close the report click File then click Exit.
5. Click Close.

• The date of the payment that pays the invoice is not dated in the CIS period.
• The nominal code on the invoice is not a CIS Labour nominal code. To check which nominal codes are set up for CIS click Settings then click Company Preferences then click CIS and click View/Edit Nominal Codes.
• If the subcontractor has not yet been verified the invoice is not included in the CIS Return. You can check this within the CIS tab on the subcontractor record.

It's good practice to send your subcontractors a monthly CIS statement.

1. Click Subcontractors and select the required record.
2. Click Statements then click Layouts and click Subcontractor Monthly Statement.
3. Choose the required output then click the Month End Date drop-down and select Is and enter the required month end date, for example 05/07/2015 and click OK.

   The period of a CIS return is from the 6th to the 5th of the following month, for example 6 June 2015 to 5 July 2015.

1. Click Bank accounts then click Bank payment.
2. Enter the following information:

   Bank	Date	N/C	Net	T/C	Tax
   Bank account reference, for example 1200.	The date of the payment.	CIS tax liability, for example 2102.	Gross amount.	T9	0.00

3. Click Save then click Close.