Record CIS payment to HMRC

Summary

How to record a CIS payment to HMRC in Sage Accounting.

Description

Each month, pay HMRC the CIS tax you deduct from your subcontractors. The payment deadline is the 22nd of the month, or by the 19th if you're paying by post.

When you pay a subcontractor, we record the amount owed to HMRC on your CIS Tax Liability Realised (2502) ledger account.

Once you pay HMRC, record the bank payment against the CIS Tax Liability Ledger account. This brings your reports accurate and your bank balance up to date.

Resolution

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.
Select Save.

▼ See a breakdown of the ledger movements

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

Ledger Account	Debit	Credit
Trade Creditors	90
CIS Withheld	30
Bank account		90
CIS Tax Realised		30

With reverse charge VAT

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

Solution Properties