Hi
I have a CIS Contractor, who is paying the subbies at 20% deduction. The entries I have are as follows: (no VAT applicable)
Gross payment £1,000 less CIS @20% = net payment of £800
Dr Labour £1,000
Cr Bank £800
Cr CIS payable on Balance Sheet £200
Is this correct? Thanks
Replies (3)
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That's a short cut and assumes no invoice raised by the subbie which you would want to post to the supplier account. If payment is timely it might not matter but if the contractor is a slow payer it might.