I have just started at a new construction firm and politely putting it, the accounts are all over the place.
The one area I need assistance with is CIS as I have not been involved with this scheme for over 10 years, therefore my knowledge is a tad rusty.
The company contracts sub contract work to both VAT and non VAT registered subcontractors. I understand the domestic reverse charge concerning the VAT registered subbies and how these should be processed for CIS/VAT however rather embarrassingly I am stumped with the non VAT subbies.
Currently the finance team are posting the non VAT subbies net sum of the invoices to Sage50 using vat code T1 and amending the tax to zero, they are then inputting a separate invoice for the CIS tax deduction and coding this to T9.
Aside from the fact this seems utterly backwards to me (I am now setting up the CIS module on Sage to ensure inputs are correct), all the invoices they input show on the VAT return in box 7.
I believe this is incorrect as these invoices are out of the scope of VAT therefore should be coded to T9, however I fully understand my assumption may be incorrect and if anyone can advise, I would appreciate it.
My question is, are all the invoices submitted by non VAT subbies and subject to CIS deductions classified as out of scope of VAT therefore these transactions should be coded to T9 so they do not appear on the returns?
Many thanks in advance.