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4c. How do I pay CIS subcontractors, by invoiced 'CIS labour'?

Paying invoiced CIS labor3:46

"How do I pay CIS subcontractors, by invoiced "CIS labor"?"

Sometimes your CIS subcontractors, rather than giving you their total hours worked, instead give you an invoice for their: "CIS labor"

To pay a CIS subcontractor for their invoiced "CIS labor":

  1. First, select the CIS subcontractor on: "Menu", then "People"
  2. Then tap: "Tax", then "Tax settings"
  3. And, if it's your first time to pay them, check the CIS subcontractor's been: "CIS verified by HMRC"
  4. Then to pay the CIS subcontractor, tap: "Pay", then "Add expense claim"
  5. And select: "CIS labor"
  6. Type in the money amount on the invoice and tap: Next
  7. Type in any notes to go along with the expense claim. For example, you could enter the invoice number. Then tap: Next
  8. And because you're entering the "CIS labor" expense claim as an admin, you'll see that it's been automatically approved.
  9. Next, to see their "CIS labor" expense claim on the CIS subcontractor's paystub, tap the arrow (at the top).
  10. And scroll down to see the gross amount that the CIS subcontractor charged.
  11. You'll also see the CIS deduction that you'll pay to HMRC in a few weeks.
  12. And you'll see the "Net pay" amount that the CIS subcontractor gets paid into their bank account.
  13. Normally you'll wait until payday to pay it, but to pay the paystub now, tap: Go to "Pay now" report
  14. Once everything's checked, tap: File now
  15. Now that it's filed, if you go to the pay batch's "To-do" tab.
  16. And open the upcoming "HMRC taxes" task that comes after the payday for the paystub you recently filed.
  17. And finally, you'll see that the "CIS deduction" of "£200" is all queued up, and ready for payment to HMRC.

You may notice:

  • That sometimes your CIS subcontractors are VAT registered, and add a VAT amount to their invoices.
  • If the CIS subcontractor is VAT registered: only enter the amount before VAT is added (remove the VAT if you need to).
  • However, if the CIS subcontractor isn't VAT registered: VAT shouldn't appear, so use the amount from the invoice.

To learn more:

Keep in mind that:

  • It's fine for a single pay batch to have some CIS subcontractors using timesheets, and others using a system for tracking their hours.
  • And still others invoicing for a money amount of CIS labor.
  • Any combination of the three payment methods works, and you can switch from one to another with any CIS subcontractor, at any time.

And that's it! That's all you need to do to pay CIS subcontractors, based on their invoiced CIS labor!

Updated: Thu, Oct 26, 2023.

© 2020–2024 1st Money UK Holdings Ltd. All rights reserved.