Hi there, Tom2510. I understand that starting out with QuickBooks can feel like a bit of a challenge. Begin by enabling the CIS feature in the Account and settings section. Next, create a service item for the admin fee. Finally, record an invoice that includes both the CIS amount and the admin fee.
First things first, let's make sure the CIS features are enabled. Here' how:
- Click on the Gear icon, then select Account and settings.
- Navigate to the Advanced section.
- Scroll down to Construction Industry Scheme (CIS) and click Edit.
- Check the box to confirm you are a subcontractor.
- Enter your Unique Taxpayer Reference (UTR) and National Insurance number, if prompted. This tells QuickBooks to create a special account to track that 20% deduction automatically.
- Click Save, then Done.
Now, if the agency charges you an admin fee, you'll need to record this correctly in QuickBooks. Let's set that up:
- Go to Sales & Get Paid, then Products & services.
- Click New product/service, then Service.
- Name it "Agency Admin Fee."
- Under the Income account, you can actually link this to an Expense account (like "Bank Charges" or "Professional Fees") because this is a cost to you, not income.
This is the most important part. You need to show the full work done, then let the system subtract the CIS and the fee. Here's how:
- Click +Create, then Invoice.
- Select your Customer (the Agency).
- Line 1: Select your standard work/labor item. Enter the Gross amount (the full price before any deductions).
- QuickBooks will automatically calculate the 20% CIS deduction at the bottom if you select a CIS-enabled category.
- Line 2: Select the Agency Admin Fee item you created in Step 2.
- In the Rate/Amount column, enter the fee as a negative number.
- Ensure the VAT (if applicable) matches what is on your payslip.
Check the bottom of the invoice. The Balance Due should now exactly match the "Net Pay" shown on your e-payslip.
To learn more about CIS on QuickBooks, you can read this article: Setting up CIS payments and returns in QuickBooks
To ensure your CIS tax and deductions are recorded accurately and compliant with tax regulations, it’s best to consult with a qualified accountant or bookkeeper for confirmation.
If you have additional questions, feel free to comment below.
