Xero: Construction Industry Scheme

With Xero, you can now manage your Construction Industry Scheme whether you are a contractor or subcontractor ...

There is one caveat you need to be aware of. Once the Construction Industry Scheme (CIS) has been enabled for an organisation, it can not be disabled. You must be absolutely sure you understand how CIS works in Xero before enabling it.

"All Xero small business pricing includes basic Construction Industry Scheme functionality!"

It allows you to automatically calculate and apply CIS deductions to your invoices and bills, report on deductions you've made from payments to subcontractors, run your monthly CIS return, manually file it with HMRC and mark it as submitted in Xero as well as download payment and deduction statements to manually send to your subcontractors.

If you're a contractor, simply add CIS Contractor to your subscription and it will enable:

- Online filing of CIS monthly returns with HMRC from Xero
- Verification of subcontractors with HMRC from Xero
- Bulk emailing of payment and deduction statements to subcontractors from Xero

CIS Contractor functionality is free until 31st March 2020 and then will be charged at £5 plus VAT per month from 1st April onwards.

Once you've set up CIS in your organisation, you can add CIS information to your subcontractor's contact records. You need to do this for the CIS account codes to be available when creating bills. Once done, you can create invoices or bills using the CIS account codes. You need to create CIS invoices or bills in order to generate CIS reports and returns.

"You can then run the CIS reports determining your CIS tax obligations!"

If you're a contractor and you've added CIS Contractor to your subscription, electronically file your CIS Return with HMRC, then send payment and deduction statements to your subcontractors from Xero. If CIS Contractor isn't part of your subscription, run the CIS Return in Xero and manually file it with HMRC, then download the payment and deduction statements to manually send to your subcontractors.

If anything I've written here resonates with you, call me on 01604 420057 and let's see how we can help you.