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Level 2

Journal CIS Suffered to Payroll Liabilities: HMRC?

Good evening,


I am a sub-contractor and I suffer CIS deductions. For tax year 2019 - 2020 I suffered £1000 of CIS that I am owed by HMRC. £600 of this was used to offset my Payroll bills in the year.


1. Should I be journalling each month the amount of CIS suffered used to offset my payroll liabilities? From "CIS suffered" account to "Payroll Liabilities: HMRC"?


2. This left a CIS balance of £400. I have requested this refund from HMRC as this was not used against any payroll liabilities by the end of the tax year and this has now been paid to my Current Account. Should I create another journal of £400 from "CIS Suffered" to "CURRENT ACCOUNT" and then match the banking transaction to that?


I am still very new to this and I really appreciate and rely on the help provided on these forums - Many thanks!

Level 2

Journal CIS Suffered to Payroll Liabilities: HMRC?



I've also got the same question as Jalexanderplant.


We have had a refund of over 9k, as it can not credit into the CIS suffered account as that is calculating this tax year for each monthly return, how can this be processed on the system?



John C
QuickBooks Team

Journal CIS Suffered to Payroll Liabilities: HMRC?

Hi Becky87


You would have to journal the CIS suffered amount to the payroll liability account/s, so the liability accounts are negated. In relation to any refunds issued by HMRC, you will have to create a specific income or equity account and create a deposit and in the account column of 'add funds to this deposit' section select the income/equity account.

Level 1

Journal CIS Suffered to Payroll Liabilities: HMRC?

Im really sorry John, I need you to simplify this as I do not understand what do you mean. 


Please can you do this in a step by step guide. Thanks 


I received a refund from the HMRC and I don't know how to process it. 

QuickBooks Team

Journal CIS Suffered to Payroll Liabilities: HMRC?

I appreciate you joining the thread, @JamesVTT. Let me guide you on how to record you refund from HMRC. 

In QuickBooks Online, we can record a refund from HMRC by creating a bank deposit. Then use an income or equity account since this is considered money in the transaction. Let's start by adding an account to your chart of accounts if you haven't already. 

I also suggest, you reach out to your accountant if you're not sure what account to use, for they also know what's best for your books.

Here's how to create an account: 

  1. Go to the Accounting tab on the left navigation bar. 
  2. Select Chart of Accounts, then click New
  3. Click on Income or Equity in the Account Type field. 
  4. Choose Detail Type in the drop-down arrow. 
  5. Enter a unique name for easy tracking. 
  6. Then, Save and Close

You can also check this article if you need more information on how to set up and add accounts to your chart of accounts.

After that, we can now create a bank deposit and use the account we previously created. We can follow the steps below:

  1. Click on the +New button, then select Bank deposit. 
  2. In the Account column of Add funds to this deposit section, select the income/equity
  3. Enter the amount and tap Save and close. 

Once done, you can review the Deposit Details for the past bank deposits.

For the detailed instruction on how to record and make bank deposits in QuickBooks Online, you can check out this article

In case you want to categorise and match online bank transactions in the future, you can refer to this article

Let me know if you have clarifications regarding my response. I'll be here to guide you and clarify things to you. Have a wonderful day!

Level 1

Journal CIS Suffered to Payroll Liabilities: HMRC?

This is then an income and shows on my profit and loss report. This means I’ll then pay tax on it…. What would be wrong? 

QuickBooks Team

Journal CIS Suffered to Payroll Liabilities: HMRC?

Hi there, @JamesVTT. I'm here to lend you a hand and provide the steps you need to record your refund from HMRC. 


About your concern, you can record VAT refunds in QuickBooks Online. This way, you can record the payment you received from HMRC.


Here’s how:

  1. Go to Taxes, then select VAT.
  2. Select the All returns ▼ drop-down menu, then choose the specific VAT period you need.
  3. Select the View summary ▼ drop-down menu, then select Record Refund.
  4. Select the bank account the refund has gone into.
  5. Make sure you've selected Refund under Payment Type.
  6. Enter the refund date and amount in the appropriate fields.
  7. Add a memo if needed.
  8. Select Save.

This will then record the payment as being refund to which ever bank account you selected.


If you have any trouble with any transactions in QuickBooks, please let me know and I’ll do everything I can to help here in the Community!

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