How to enter a credit for CIS supplier

jonbunt · ‎May 21, 2021

How do you enter a credit for a CIS supplier as there is no "Less/Add CIS" box available on the credit entry like there is on the bill entry. If a credit for a partially paid invoice is created it is also treated like a payment when allocated to the invoice and appears on the monthly return (but it is not a payment). The tax amounts will also be incorrect as no adjustments are made using a bill credit.

There must be a workaround with journal entries for all the necessary accounts to all be corrected.

Perhaps someone could enlighten me?

GeorgiaC · ‎May 21, 2021

Hi jonbunt, thanks for joining us here on the Community :)

It's not possible to use CIS on a credit transaction in QuickBooks, and any payment that closes the bill will post the full CIS withheld amount to your return. We'd recommend reaching out to your accountant for assistance in recording the journal entry, or alternately, you may wish to edit the original bill to split this over 2 lines - one with CIS and one without reflecting the partial amount to be credited.

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GeorgiaC · ‎May 21, 2021

Hi jonbunt, thanks for joining us here on the Community :)

It's not possible to use CIS on a credit transaction in QuickBooks, and any payment that closes the bill will post the full CIS withheld amount to your return. We'd recommend reaching out to your accountant for assistance in recording the journal entry, or alternately, you may wish to edit the original bill to split this over 2 lines - one with CIS and one without reflecting the partial amount to be credited.

jonbunt · ‎May 21, 2021

If you amend the original invoice with 2 line items one with CIS and one without, this would be incorrect as the partial credit needs to account for CIS tax as well.

Try comparing this with an example of a partially paid invoice with CIS and check the reports that are prepared for submission to the HMRC for CIS purposes.

Use an example that includes Labour, materials, CIS Tax and VAT.

eg £1000 labour, £500 materials, VAT of £300 and Less CIS Tax of £200, Invoice Total (after CIS taken out) £1600.

Then apply a partial payment of say £1000, and view and check the CIS reports for submissions are correct, and then credit the outstanding £600 (which relates to labour only so will need to also include CIS tax) ,and again check the reports for submission to HMRC.

Please let me know how it goes because this process appears to causing issues with subcontractors submissions with HMRC.

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How to enter a credit for CIS supplier