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Accounting for CIS suffered

Forum|Forum|5 years ago
June 18, 2021
8 replies
27 views

After submitting payroll FPS and EPS reflecting CIS suffered to HMRC I’ve paid the balance to HMRC via a direct debit. After matching that payment to HMRC payroll liabilities I’m left with a balance sheet entry for HMRC payroll liabilities which (unsurprisingly) matches the CIS suffered. How do I reflect the ‘benefit’ of CIS suffered in my accounts?

QuickBooks Online

Best answer by Archie_B

Hi, did you see my (sadly late) reply to your post? I've still got a problem.

Thank you for following up, Gonzosgone.

Yes, I appreciate the details you've given us about this.

The CIS suffered summary would show the CIS deductions withheld by contractors. Since it included the journal entry you created for HMRC payroll liabilities, I suggest you consult an accountant for additional guidance on how to properly account the journal entry.

That being said, there may be additional accounts that needs to be debited and credited to clear the balance sheet while making sure your reports for CIS suffered are accurate.

Post your concerns or click the reply button for any follow-up questions. I'll keep an eye on your response. Have a great day.

A

Ashleigh1

Level 14

Hello Gonzosgone,

Welcome to the Community page,

So you can journal it out, to show it, if you are not sure how to do the journal and need assistance with creating the journal entry then you will need to speak to an accountant and they will be able to help and advise you how to do it.

G

GonzosgoneAuthor

So I journal a debit from CIS suffered to HMRC Payroll liabilities? If I do that the balances look correct but obviously when I run a CIS suffered report the reduction in CIS suffered is reflected. I'm concerned that when I generate next months EPS for CIS then the cumulative CIS suffered totals reported to HMRC will be incorrect. Am I being neurotic or am I doing something wrong?

G

GonzosgoneAuthor

Hi there, Gonzosgone.

Welcome back to the thread. I'll share additional information on how CIS works in QuickBooks Online.

When you turn on CIS, we’ll create the accounts you need to be able to track it. That means, when you create CIS transactions we’ll calculate the CIS withheld. Then, creating a journal entry does not or won't affect the CIS reports in QBO. You'll have to use the CIS codes and items in order for it to affect the CIS Screen. With this, it will reflect in your reports accurately and you're able to file this transaction online. To see additional information on how CIS works, you can click on this article: CIS in QuickBooks Online.

Please refer to this article to see different information on how you can pay Income Tax and how Net VAT and CIS payments operates: Understanding Income Tax.

Let me know if you have other concerns with QuickBooks. I'm always around to lend a helping hand. Have a nice day ahead.

Sorry for late reply, I've been away this week.

I'm afraid I still have a problem. Let me describe what I've done and maybe you can identify my blunder!

My problem is that I pay the net balance of my HMRC payroll liabilities less my CIS suffered each month to HMRC. My balance sheet doesn't reflect that (it has no knowledge of the transaction) and it shows an outstanding HMRC payroll liability and an asset which is my CIS suffered.

It was suggested that I 'journal out' my problem. I'm not an accountant (that's why I'm using QBO) but I take that to mean I make a journal entry which credits CIS suffered and debits HMRC payroll liabilities.

When I do this the balance sheet looks fine - my HMRC payroll liabilities reduce to zero and my CIS suffered asset reduces by the appropriate amount.

The problem comes when I run a CIS report (Fetch CIS is the CIS element of the payroll page). The report then includes my journal entry as an adjustment to my CIS suffered account for this period. This report is what generates the EPS return for HMRC.

So I must be doing something wrong. Is it the format of my journal entry? Should I be mechanising the transfer between my CIS suffered asset and HMRC payroll liability in some other way?

Thanks for any suggestions

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