Set up CIS for your business

Summary

How to set up CIS for your business in Sage Accounting.

Resolution

Turn on the CIS features in Accounting to:

Record your CIS registration details
Add CIS ledger accounts to your chart of accounts
Add CIS options to contact records to allow you to set up contacts as contractors or subcontractors
Produce CIS transactions and reports

TIP: Once CIS activation occurs, the options will always be available on your contacts and chart of accounts.

Activate CIS

When you activate CIS for your business, we'l add new CIS ledger accounts to your chart of accounts. Keep to the ledger accounts we’ve created or for more detailed reporting, create your own additional ledger accounts.

Once you've set up your CIS contacts too, you'll start to see CIS deductions automatically applied to your transactions.

Make sure you have permission to update your financial settings and activate CIS. You’ll need to be a user with Full Access.

Select Settings, then Business Settings.
Under Financial Settings, select Construction Industry Scheme (CIS).
Select I'm CIS Registered.
Select whether you're a Contractor, Subcontractor, or both.
Enter your Unique Taxpayer Reference (UTR).
If you're a contractor, enter your Accounts Office Reference and Employer's PAYE Reference.
If you're a subcontractor, select your Deduction Rate.
Select Save.

CIS ledger accounts

Once CIS activation occurs, we will establish all necessary CIS ledger accounts for you and include them in your chart of accounts.

We'll use the next available nominal code in the range for each section of your chart of accounts. For example, in the sales category, if 4910 is the last code used, we'll use 4911 for CIS Labour and 4912 for CIS Materials.

Alternatively, if you want to do more detailed reporting, you can learn how to set up your own CIS ledger accounts . You might want to do this to report separately on different types of labour or materials.

CIS ledger accounts for subcontractors >

Code	Ledger Name	Category	Category Group	VAT Rate	Used on	Description
4911	CIS Labour	Sales	Income	Standard 20%	Sales, Journals, Reports	Records income received from CIS labour on sales invoices.
4912	CIS Materials	Sales	Income	Standard 20%	Sales, Journals, Reports	Records income received from CIS materials on sales invoices.
	The CIS Tax Asset ledger accounts					Used to record the expected CIS amount deducted reduce the amount owed on the invoice.
1131	CIS Tax Asset Withheld	Current Assets	Asset	No VAT	Journals, Reports	This function records the CIS amount deducted from a sales invoice, representing the anticipated withholding amount, providing a comprehensive view of your CIS deductions
1132	CIS Tax Asset Realised	Current Assets	Asset	No VAT	Journals, Reports	When you pay the invoice, the system moves the CIS amount from the Withheld account to the Realised account, indicating the total amount of CIS that has actually been withheld.

CIS ledger accounts for contractors >

Code	Ledger Name	Category	Category Group	VAT Rate	Visibility	Description
5111	CIS Labour Expense	Direct Expenses	Expenditure	Standard 20%	Purchases, Journals, Reports	Records CIS labour charged on subcontractor invoices.
5112	CIS Materials Purchased	Direct Expenses	Expenditure	Standard 20%	Purchases, Journals, Reports	Records CIS materials charged on subcontractor invoices.
	The CIS Tax Liability ledger accounts					Used to record the amount of CIS amount withheld, letting you see your total liability at a glance.
2501	CIS Tax Liability	Current Liability	Liability	No VAT	Journals, Reports	This records the amount of CIS deducted before the invoice is paid, representing the amount you expect to withhold from the subcontractor.
2502	CIS Tax Liability Realised	Current Liability	Liability	No VAT	Other Payments, Journals, Reports	When you pay the invoice, the system automatically transfers the CIS amount from the CIS Tax Liability account to the CIS Tax Liability Realised account, showing your actual liability amount.

Set up CIS for your business

Summary

Resolution

Activate CIS

CIS ledger accounts

CIS ledger accounts for subcontractors >

CIS ledger accounts for contractors >

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