UK CIS subcontractor


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Hi,

Can anyone out there help me.
I am trying to work out how to enter CIS suffered by a limited company (working as a subcontractor) can be entered on sage 50.

20% has been deducted at source already and I am happy with how I can offset this on payments due to HMRC.

However I am unsure how I should enter this up on Sage? I have seen a number of comments suggesting that I could set up a new bank account 'CIS suffered' but I am unsure of the next step.

Can anyone provide any advice?

Thanks,
Jacqui
 
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I think setting up a dummy bank account called 'CIS Deduction' would be the best route. For example, say you had a sales of £2,000 the postings should be as follows:-

Sales Posting or Invoice:-
Dr Sales Ledger------2,400.00
Cr VAT-------------------------------------400.00
Cr Sales--------------------------------2,000.00

When the amount has been received minus the 20% CIS deduction, you would post a bank receipt as normal to the main bank account:-
Dr Bank----------------------2,000.00
Cr Sales Ledger------------------------2,000.00

You would also post a bank receipt though the 'CIS Deduction' account:-
Dr CIS Deduction-------------400.00
Cr Sales Ledger-------------------------400.00

Obviously, the amounts deducted from your client's own subcontractors would be done as a bank payment to the CIS Deduction account.

At the end of each PAYE month, you should work out the net amount to be deducted from the monthly PAYE liability and post the bank payment:-

Dr PAYE/NI Creditor-------------------XXX
Cr CIS Deductions---------------------------XXX

The CIS deductions account should come down to zero at the end of each PAYE month!
 
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