Pay any Construction Industry Scheme (CIS) tax deductions deducted from subcontractors to HMRC each month. Pay by the 22nd of the month, or by the 19th if paying by post.
When paying a subcontractor, record the amount owed to HMRC in your CIS Tax Liability Realised (2502) ledger account. After paying HMRC, record the corresponding bank payment to reflect CIS payments in reports and update the bank balance. Whether importing transactions or inputting them manually, always choose the CIS Tax Liability Realised (2502) ledger account You pay the subcontractor and withhold the CIS deduction of £30. Record CIS deduction in the CIS Tax Liability Realised ledger, resulting in a £30 balance. | Without reverse charge VAT |
| With reverse charge VAT |
|---|
| Ledger Account | Debit | Credit |
|---|
| Trade Creditors | 90 |
| | CIS Withheld | 30 |
| | Bank account |
| 90 | | CIS Tax Realised |
| 30 |
|
| | Ledger Account | Debit | Credit |
|---|
| Trade Creditors | 70 |
| | CIS Withheld | 30 |
| | CIS Labour Expense |
| 70 | | CIS Tax Realised |
| 30 |
|
You pay the withheld amount to HMRC and record it against the CIS Tax Realised ledger account. The balance of the account is now 0. | Ledger Account | Debit | Credit |
|---|
| Bank account |
| 30 | | CIS Tax Realised | 30 |
|
Record the payment- From Banking, open the required bank account.
- Choose New Entry, then Purchase / Payment.
- Choose Other Payment then enter the date for the payment.
- Enter the total amount paid to HMRC for the period.
- For the Ledger Account, choose CIS Tax Liability Realised.
- Choose No VAT for the VAT rate.
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