The ever-expanding functionality of Xero – CIS
If you work in the construction industry you may find the daily/monthly administration side of CIS a burden. You have to: enter your new subcontractors details to your system, go to the HMRC website to verify the contractors details to…
Blog7th Nov 2018
If you work in the construction industry you may find the daily/monthly administration side of CIS a burden. You have to:
enter your new subcontractors details to your system,
go to the HMRC website to verify the contractors details to ensure they are signed up for the scheme
ensure your accounting software has the appropriate nominal codes set up for CIS
calculate the amount of deduction to take from each subcontractor bill, remembering the VAT and no deduction from materials, equipment hire etc
keep a record of the amounts deducted and pay over to HMRC
send a monthly return to HMRC to tell them about the payments you’ve made to subcontractors
send your subcontractor a payment and deduction statement within 14 days of the tax month end
All while trying to run and expand your business!
Xero’s easy-to-use CIS features can help reduce this administration time by automating much of the manual processing for you. It’s quick and simple to set up, just tick the checkbox to indicate whether you are a sub-contractor, contractor or both and enter your CIS credentials. Xero will automatically create the CIS nominal codes within your Chart of Accounts for use when completing invoices relating to sub-contractors and contractors. When entering a purchase or sales invoice, Xero will automatically calculate the deduction once you have set up the CIS information relating to that contact.
Inputting the contact information couldn’t be easier, just import via a CSV file to Xero. There’s even a handy link to the HMRC website to verify your sub-contractors which appears when entering the contractors UTR. In time Xero will be able to verify these contractors for you direct with HMRC, this is currently being worked on by their tech team. Invoices can easily be emailed to sub-contractors along with the monthly payment and deduction statement at the click of a button. You can also set up default email templates to attach with the invoices/statements to save time.
When it comes to submitting your monthly return to HMRC, Xero will calculate your figures for you within seconds. This report can be downloaded in pdf or excel format which makes it easy to submit to HMRC. Again, in the near future you will be able to submit this direct to HMRC at the click of a button with no need to log onto the HMRC website separately.
Completing your construction industry scheme administration couldn’t be easier in Xero and with its ever-expanding functionality and seamless updates why would you want to use anything else?
For more information please contact Lynsey Taylor (firstname.lastname@example.org) or your usual AAB contact.