Hi there,
Hope someone can help me!
When there is a refund of CIS, for a Ltd. Company i accounted for it by showing the figure, as other debtors in the B/S and the corresponding entry for that was shown, as a reduction in the final CT liability. The problem with this is when come to submitting the CT Return via the HMRC web site. It is not happy to accept a refund for CT liability. Is there any other way of dealing with this? Pls help
Replies (8)
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Corresponding entry?
There's no corresponding entry on it's own. You have to do a journal for the payroll and entries for the sales invoices and purchase invoices. This produces the CIS refund. You shouldn't work backwards from a refund figure.
I think ....
... understated your sales, you have. Yes, hmmm.
Deduct from CT, you could, or PAYE, but either way the net refund, shown as a debtor would be, not a negative creditor. Yeesssssss.
Being paid to do them for someone else I trust you are not, and that these are your own accounts. Yes? hmmm.
This is what I do
I am using Quickbooks and i'm sure there is a clever way of doing this but this is the way I do it.
I set up a bank account called CIS
I pay supplier invoices from subcontractors using current account and CIS account for the CIS tax we have witheld.
I receive money from contractors from the current account and the CIS suffered is paid from the CIS account.
This way your sales are not understated, your balance sheet shows the correct figure as all CIS is in one account and it makes it easier to calculate CIS repayments on tax suffered.
I've been told that this can be done automatically by using the list function in QB but i havn't worked out how to do that yet!!!