Setting up Construction Industry Scheme reporting in QuickBooks Online.
This content is designed to support the video “CIS in QBO” which explains the full process and reporting functionality in QBO. This article is designed to help recap on how to set-up CIS.
CIS is now fully supported by QBO, the first online software supported by AG Connex to do so! Follow the steps below to get started with CIS recording:
- Click the “Company Cog” top right, and then select “Account and Settings”:
- Navigate to “Advanced” on the left-hand menu:
- You’ll see a line for “Construction Industry Scheme (CIS)” – click the pen icon to the right of this (at the top of the “Accounting” box)
- Tick the box next to CIS and fill in the details relevant to you:
- Once you hit save, you will be ready to use CIS in QBO. There are a few further set-ups needed for raising sales invoices and entering purchase invoices where CIS is deducted – check out our video for furthter information
Setting up CIS customers in QBO
Once you’ve enabled CIS functionality within QBO there are a few other settings needed to make full use of the features! This article details the steps needed to designate a customer as someone you withhold CIS from, and how to enter this when raising your sales invoices.
Setting up the customer
- Head to your customer screen by using the navigation panel on the left of your screen
- If your customer has already been set-up, click their name and then click “Edit” next to the green “New transaction” button: If you haven’t set your customer up yet, just hit the green “New customer” button in the top right of your screen.
- Once you’ve opened your customer settings (either for a new, or existing customer) you need to tick the “Is CIS contractor” box. If your customer has already given you their Unique Tax Reference number enter this in the box provided:
- Once you’ve hit save, you’re ready to raise invoices to customers with CIS withheld. Use your preferred path to a new customer invoice for the customer you’ve just changed settings for. As soon as you set-up a sales invoice for this customer, the “CIS labour standard (20%)” service will auto-populate (unless you’ve amended the standard CIS rate).
- Once you’ve entered a rate (I’ve used £50) the CIS will automatically be calculated on the net of VAT amount. You’ll notice the VAT and CIS amounts are in boxes, so whilst they are auto-populated, they can be overtyped if necessary (although we wouldn’t recommend doing this!).
- Hit save, and send your invoices out to your customers as normal, safe in the knowledge that the CIS has been recorded in QBO!
Setting up a CIS subbie in QBO
- Navigate to the supplier section of QBO and either select a subbie from your list (if already set-up) or create a new one.
- Once you’re in the “Supplier Information” screen tick the “Is CIS subcontractor” box, if you scroll down, you’ll see you can enter various information about the subbie too! Entering the UTR will give you more information when it comes to CIS reporting. Make sure you enter the correct rate for CIS – the dropdown will allow you to switch to the higher rate of 30% or the gross rate of 0%. This will enter the default CIS rate used for this subbie, you can update this on an individual basis in the future if necessary. You can also change the subcontractor type to “Company”, “Partnership”, or “Trust”.
- Once you hit save you’re ready to enter your subbie’s invoices onto your system as an expense!
- Creating an expense will automatically bring in a “CIS cost standard (20%)” line (unless you changed your default rate. If your subbie has given you an invoice or receipt which doesn’t have labour on it you can simply change the account to something more relevant (“CIS supplies and materials” perhaps?) or delete the line entirely by clicking the bin icon on the right of the line.
CIS reporting in Quickbooks Online
There are a few difference reports available in QBO to help you with your CIS reporting.
To access these, head to the reports section, select “All Reports” and then look for “Manage Construction Industry Scheme (CIS)”
CIS Payment and Deduction Statement
As indicated by QBO’s blurb, this report is useful where you pay subbies to undertake labour for you. When you initially run the report, it will show a list of all the subbies who have invoiced you during the period (which defaults to the current payroll month – i.e. 6th of a month to 5th of the following month).
If you click into “Amount liable to deduction” for any line, you’ll get a separate report for the individual subbie, since you probably don’t want each subbie seeing how much you’ve paid the others. You are then able to export this report to PDF to send out to your subbies, or email it directly from QBO! Easy!
CIS Contractor Monthly Statement (CIS 300)
This report gives you all the information you need to submit to HMRC each month as part of your CIS reporting duties.
Clicking through to the report will default to the payroll month (as before) however if you need to report on the previous month, you can change the dates at the top of the screen to agree to the dates on your CIS 300. Just remember to hit “Run report” after changing your dates.
If you have no data for a month, QBO will issue a report which indicates that a nil return must be submitted to HMRC (or, you haven’t been using the QBO CIS functionality on your invoices!). Where you do have data in the report, simply use the numbers given to help you to fill in your CIS 300 as you normally would.
CIS Suffered Summary
If you are a subbie and therefore reclaim the CIS withheld from you on your personal tax return at the end of the year, this report is for you.
The report defaults to the entire tax year and will show you the total amount of CIS you have suffered. This can then be entered on your personal tax return as a tax paid at source, and will either reduce the tax payable on 31 January or in some cases may trigger a rebate from HMRC.