VAT reverse charge and CIS and how to record difference from invoice

Steveleet · ‎May 13, 2022

Can anyone help with the following.

I have sent a invoice to a client for some work.

The invoice was broken down with my materials and labour and we are vat registered.

The invoice total was £298.90 in quick books.

The client has paid £255.90 as deducted under CIS and vat reverse charge and paid £255.90.

How to I record the difference correctly in quick books as the invoice is showing the £298.90 and the bank feed from income is £255.90.

Under the CIS the labour excluding var was £215. Materials 34.09.

Totals CIS tax £43 and VAT £49.81 leaving the client to pay us £255.90.

I was not sure how to correctly record this in the accounts. Any help would be appreciated?

Steveleet · ‎May 18, 2022

Thank you for your response. I did not have the CIS part set up in my QuickBooks but now have amended this and the invoice balances correct to payment now.

View solution in original post

paul72 · ‎May 14, 2022

Hi @Steveleet

If you have CIS setup correctly in QBO & have used CIS Labour (20%) on your invoice for the Labour element it should do this automatically. The amount due in QBO will be £255.90 (with £43.00 CIS deduction expected).

Presumably, you were expecting the 20% CIS deduction on the labour (you are registered for standard deduction, not gross status)?

You also mentioned Reverse Charge VAT (which would be £nil) but you have it calculated at 20%. If the client is the end-user, Reverse Charge does not apply - use S20 code instead.

Hope this helps.

Steveleet · ‎May 18, 2022

Thank you for your response. I did not have the CIS part set up in my QuickBooks but now have amended this and the invoice balances correct to payment now.

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VAT reverse charge and CIS and how to record difference from invoice