This article explains how to record CIS deductions and income received.
To record Income received as a Sub Contractor, you would input the following:
Example - Income of £1000 gross and 20% CIS was deducted by the contractor (£200.00) so the net amount received was £800,
In Sales, enter the amount of gross income (£1000) and the CIS deducted (£200) in the CIS column on the same row.
In current account enter the amount actually received from the debtor (main contractor) £800.00
In the cash account payments section make 2 entries:
• A payment to CIS of -£200 (minus 200) using code RC
• A payment of Corporation Tax of £200 using code RT
This "journal entry" is cash neutral and just moves the liability from one account to the other.
Your corporation tax calculation remains the same, but the liability in the balance sheet reduces.