Cloud Accounting Tips & Tricks: CIS & QuickBooks

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The QuickBooks CIS module, which is free to access for those already subscribed to QuickBooks Online (QBO), unites the computation, management and reporting of Construction Industry Scheme (CIS) deductions on a single platform.

As a result, construction contractors need worry no more about laborious manual calculations and a lack of confidence in their numbers. 

Other platforms do offer equivalent functionality, so it’s worth discussing with your adviser which is the most suitable software for your business.

The following are some of the key features worth being aware of if you are considering or decide to use QuickBooks CIS.

  • Submitting a CIS return

You can submit your CIS return directly to HMRC, via QBO, and also account for any CIS payments that you make to HMRC. It’s worth bearing in mind that if you need to make changes to any payments relating to a period for which a return has already been submitted, you will first need to ‘unfile’ the return.

  • Record and report CIS deductions on behalf of subcontractors

Under the CIS, contractors must take responsibility for calculating and deducting any tax that is due to HMRC, on behalf of any subcontractors. QuickBooks CIS facilitates this by enabling contractors to record deductions suffered in its ‘Standard Payroll’ function and report these to HMRC via the Employer Payment Summary (EPS).

Note: If you have transitioned from another payroll software, to QuickBooks Standard Payroll, CIS deductions recorded previously will need to be manually added to QBO to ensure your cumulative figures are correct.

  • Manage CIS transactions

You can pay subcontractors, receive payments from contractors and match CIS transactions in QBO. The software uses the appropriate CIS rate, as determined during the verification process, to calculate deductions. When matching transactions from the bank feed, a contractor/ subcontractor must be assigned so QuickBooks recognises it as a CIS transaction.

  • Custom CIS reporting

If you are using QuickBooks CIS, you will have access to the following reports; CIS Contractor monthly statement, CIS payment and deduction statement (can be generated monthly) and a CIS suffered summary. These reports should enable you to always maintain a useful overview of your CIS position and liabilities, and to quickly provide subcontractors with the paperwork they need.

  • Domestic VAT Reverse Charge

If you have correctly enabled VAT and CIS in QBO, you will be able to select to apply either a 20% or 5% VAT rate to transactions. QBO does the rest, by accounting for the reverse charge and reflecting this on your VAT return.

Our cloud accounting experts in Cambridgeshire, Bedfordshire and Hertfordshire are here to help you explore what works for your business, and to ensure you’re getting the most out of your chosen software.

If you’d like to find out more about how QuickBooks, or any of the other market-leading software, could help you to manage your CIS obligations, please contact us.

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    Samantha Green

    Samantha Green

    Associate Partner
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