sblive Xero Guide

This will allow you to invoice a CIS contractor using the CIS labour income account.

You will need to check that the subcontractor rate in your financial setting has been set so Xero knows the CIS rate to apply to the invoice.

Xero calculates the CIS deduction that will be held by the contractor and displays it separately on the invoice, below the invoice total.

The CIS deduction is calculated on the total invoice amount, less any discounts.

You can't create or edit a CIS invoice on the Xero Mobile app or API, or select CIS account codes when creating repeating invoices.

CIS isn't compatible with new invoicing in Xero, so you need to use classic invoicing to calculate CIS deductions on invoices.

In the subcontractor’s account, add a new invoice. In the Account line, select ‘CIS Labour Income’. For other income that is not subject to CIS need to use another income code as appropriate.

When the invoice is approved, Xero will post the amount of the CIS deduction to the CIS Asset Account. This shows the total withheld by the contractor and paid to HMRC on your behalf.

When your invoice has been paid, you will need to run the CIS Subcontractor (CIS Suffered) Report to show a summary of CIS deductions withheld by contractors on your behalf, and payable to HMRC.

Page 141 of 166

Made with FlippingBook - professional solution for displaying marketing and sales documents online