When payments appear on CIS reports

Allocate all payments received in a given period to a CIS invoice. Do this before you run any reports or returns.

Payments included in the CIS 300 Monthly Return use the date of the payment. They don't use the date of the invoice.

For example, for an invoice dated 29/07/2020 and a payment dated 15/8/20, the allocation date is 15/8/20. It will appear when you run the report for August.

Multiple payments

You can have multiple payments allocated to a single invoice. Your CIS reports show the payment date as the date of the latest transaction allocated.

For example: You have an invoice dated 31/7/20 and you allocate payments dated 10/8/20 and 10/9/20. The allocation date would be 10/9/20. The CIS values would appear in the September report.

They can appear on your reports as individual payments (one for each month). Allocate the two payments separately.

Part payments

What to do when you will only receive a part payment for a CIS invoice and need to issue a credit note for the remainder.

For example: you have received a CIS invoice for £100 labour. With a CIS deduction rate of 30%, the amount due after the VAT reverses. CIS deducted is £70.

After a conversation with the subcontractor, you agree that the job didn’t take quite as long as originally thought. You settle on a revised figure of £50 for the labour. You pay the subcontractor the £50.

The part payment

You record a £50 payment and match it to the invoice. You now need to issue a £20 credit note for the remaining balance.

Issuing the credit note for the remaining balance

When allocating a payment to an invoice, the payment splits equally across the:

• Net value
• VAT
• CIS deduction

We need to know the paid percentage of the original invoice.

To work out the net value of the credit note, calculate the amount outstanding as a percentage of the original invoice value. In our example we had an invoice of £70 of which we paid £50, so our credit note including the CIS deduction must equal £20.

To enter the net value correctly, We need to know the paid percentage of the original invoice.

The calculation

£50 is 55.56% of £70 (50/70 x 100 = 71.43%)

Therefore, the remaining percentage to apply to the credit note’s net amount is 28.57%.

28.57% x £100 = £28.57.

Create the credit note

1. Enter the net value. In our example, this is £28.57.
2. Make sure to select Use VAT reverse charge if this has been set on the original invoice.
3. The appropriate amount of CIS deducts. In our example, this is £8.57.
4. The amount after CIS is the outstanding balance. In our case £20.

In our example, the remaining amount for the credit note was £20. Here's how it would look: