CIS - Transaction Entry
When entering transactions where a purchase invoice or credit note can be raised:
The Suppliers list will include all active CIS type Suppliers.
If the supplier code for a CIS type supplier is entered in the transaction header, or selected from the supplier list, the insurance details on the supplier record will be checked.
If the selected supplier has a CIS business type of Partnership, you must select another CIS registered supplier from the list of partners shown on the header entry window.
Transaction details should be entered in the usual way.
For subcontractor labour, you should select an analysis code with the CIS Taxable option ticked.
For subcontractor materials, you should select an analysis code with the CIS Taxable option not ticked.
When an analysis code that has the CIS Taxable option ticked is selected for a transaction detail line, the value of the line will be treated as taxable within the scheme.
The Subcontractor icon on the detail entry window toolbar will be active when a CIS type supplier is selected.
Clicking this icon will display the Subcontractor Summary window containing the details relating to the scheme.
The summary window enables you to record the Surveyor involved and the authorisation status of the transaction.
Transaction Types
Transaction types for CIS type suppliers are:
Purchase Ledger Invoices and Credit Notes; Purchase Orders and Credit Notes and Invoice Register entries for the Purchase Ledger.
Insurance
Subcontractor insurance details can be entered on the Subcontractor window, opened from the icon on the toolbar of the Supplier record.
If insurance information has been entered and the transaction date is later than the expiry date of the cover, you will be warned that the insurance has expired and asked if you wish to continue.
If no insurance information has been entered, or if the expiry date is later than the transaction date, no warning will be displayed.
Partnerships
If the CIS type Supplier selected for the transaction has a CIS business type of Partnership, you must also select the partner record on the header window.
When contracting with a partnership, it is the Tax Status of the partner who negotiated the contract that will be used when making payments.
If the Partnership record is selected on a transaction, the associated partner records will be offered for selection.
If the selected Partner has the CITB Levy option ticked in their Subcontractor record details, the Levy will be withheld from remittances to the associated Partnership.
Authorisation
If you have selected the system option Invoice Authorisation Required, you will not be able to process remittances for subcontractor invoices until the invoices are authorised.
Authorisation can be indicated on the Subcontractor Summary window when the invoice is entered and posted or later using the Authorisation window.
Settlement Discount
According to HMRC rules, VAT on all invoices should be based on the full price. Suppliers must account for VAT on the amount they actually receive, and Customers can recover the amount of VAT that is actually paid. As such, a Credit Note is automatically generated for any Settlement Discount value and allocated to the invoice and payment so that VAT is correctly accounted without the need for manual adjustments. More information with examples is available; see How To… » VAT on Settlement Discounts.
Settlement discount will be deducted before the CIS Tax is calculated.
CITB Levy will be calculated on the full invoice amount
Example: For a Labour only invoice for £1000.00. CITB Levy will be a percentage of £1000.00 (if current rate is 1.5%, this will be £15.00). If settlement discount is permitted at 2.5%, the CIS Tax will be calculated on £975 (£1000.00 less £25.00 discount). CIS Tax will be £195.00 (if current rate is 20%).