CIS Contractor bookkeeping

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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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By andy.partridge
09th Aug 2017 15:20

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.

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By Arabita
09th Aug 2017 15:25

Thanks Andy, assuming it is a shortcut.

So Labour costs in P&L are always shown gross ( net amount + CIS deducted).

Just like wages in the P&L are always shown gross.

Sorry, it is a bit of a basic question!

Thanks (1)
Replying to Arabita:
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By andy.partridge
09th Aug 2017 16:04

Yes, that's correct.

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