Xero: Construction Industry Scheme
Be sure you want to enable it ...
Posted by Alison Mead on 10/02/2020 @ 8:00AM
You can now manage your Construction Industry Scheme regardless of whether you are a registered contractor or subcontractor (or both) in Xero ...
The Construction Industry Scheme can be enabled in Xero, but can not be disabled once you've done it!
copyright: elnur / 123rf
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.
Until next time ...
Would you like to know more?
If you need some help to get your Construction Industry Scheme set up in Xero, do give me a call on 01604 420057, leave a comment below or use the Messenger tool you can see in the bottom right of your screen to chat right now. Let's see how I can help you.
About Alison Mead ...
Alison loves bookkeeping. She has been helping clients to be better bookkeepers in Sage 50 for over 22 years and has more recently added Xero Accreditation to her list of skills.
She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information.
Alison combines her role at Silicon Bullet with running two network marketing businesses and is also a Regional Leader for 4Networking as she likes to keep busy.
You know what they say, if you want something done well ask a busy person!
More blog posts for you to enjoy ...
Other bloggers you may like to read ...