Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HMRC, that are treated as advance payments towards that subcontractor's tax and National Insurance.
If your Receipt Bank account is integrated with Xero, Sage Accounting, or QuickBooks Online you can apply CIS category codes and Domestic Reverse Charge (DRC) tax rates to your subcontractors.
Before you begin
How to work with CIS in Receipt Bank
- In Receipt Bank, ensure that the supplier name exactly matches the CIS contact in your integrated software. This is so the correct tax and category information is published.
- Select the relevant CIS category from the Category dropdown:
- Publish the item as usual and the record in your integration will include all the CIS information. Please note that in QuickBooks Online you will need to manually adjust the 'Less CIS' field.
Note: If an invoice or receipt contains lines that need to be split between 'CIS - Labour Expense' and 'Materials Purchased,' use Line Items to separate them and automatically set up the deduction in your integrated software. You can also use Supplier Rules, Smart Split, or Automatic Line Item Extraction to automate this even further.
You may also want to enable DRC tax rates for your account.