Under the UK Construction Industry Scheme (CIS) deductions are usually made from pay to sub-contractors which count as advance payments towards their Tax and National Insurance bills.
For more Information see: https://www.gov.uk/what-is-the-construction-industry-scheme
This section describes how InTime can process CIS deductions for your contractors in InTime. This feature is only available for clients who either have InPay or have an outsource payroll engagement with RSM. This is because InPay is required in order to process the CIS deductions and send RTI submissions to HMRC. The facilities are only available to clients using the new InTime style on InTime V6. To have this feature enabled please contact InTime support.
This process replaces a previous CIS process, the details of which can be found here. The improvements for this version are as follows:
- This version is compatible with the /wiki/spaces/ds/pages/51875242 of InTime - you can process both CIS and Off-payroll workers on the same system. The process is very similar for both.
- CIS deductions can be applied to both Self Bill and Advice Notes as required.
- CIS workers can have placements that are CIS and non-CIS concurrently - a tick box on the placement is used to determine this. Their non CIS placements are processed as LTD and paid through Self Bill invoices or Advice notes.
- The CIS invoices or advice notes are generated through the normal invoice generation screens rather than a separate CIS Self bill screen.
A worker can not be both CIS and Off-payroll at the same time. If this is required a separate worker record must be created for each.
In order to apply CIS deductions, the following must be observed:
Your InTime system must be integrated with InPay and have the InPay Timesheet exporter selected.
The Contractor must be of type CIS
The placements for which CIS rules apply must have the 'CIS Placement' check-box selected
The contractor must be associated with an appropriate CIS payroll
The contractor must not have an umbrella (Provider) associated to their record.
- The contractor should have a CIS Deduction percentage of 20% or 30%. (0% or gross status contractors can be processed the same but will not have any CIS tax deducted).
- The contractor should have their holiday accrual set to 0%.
- Other types of Invoice Adjustment should not be made through InTime invoices - these should be done through timesheets or expenses.
The settings on the candidate record are shown below.
The 'CIS placement' setting is on the 'Advanced' tab of the Placement:
The overall process that must be operated is as follows
When the timesheets are ready for payment, these must be exported to InPay.
The payroll processes are undertaken and the payroll committed. This payroll should not be paid using the InPay BACS feature as the payments should be made from InTime.
The payslip synchronisation process must then be performed in InTime. This makes the CIS deductions available to the invoice generation process.
The Self Bill invoices or Advice Notes are generated.
If you have an outsource payroll engagement then please contact RSM when the timesheets are ready. RSM will conduct steps 1, 2 and 3.
When generating the self-bill invoices or advice notes in InTime then following must be observed:
The Payslips must have been synchronised
If more than one timesheet requiring CIS deductions is processed in a single pay period, all of those timesheets must be invoiced at the same time. This is to ensure correct allocation of CIS tax to the invoice.
All timesheets being invoiced must be associated with a single pay period. Again, this is to ensure correct allocation of CIS Tax.
The self-bill invoice or advice note cannot be generated if any of these rules are broken. InTime will display an error message and the timesheets will not be invoiced
For example, if you have not synchronised the payslips, the an error such as below will be displayed.
If you attempt to invoice items that relate to more than one pay period then you will receive an error such as the one below. In this instance you must narrow down the timesheets that are being invoiced and attempt to generate them with the smaller range.
If you attempt to invoice only some items that are in the pay period you will receive an error such as below. In this instance you must run the generation process again ensuring that all items have been selected.
If you see any of these errors you can use the preview filters such as timesheet id or date range to select which items appear for invoicing.
Credits
You must take great care when raising credit notes. Any invoice containing CIS deductions must be credited in full. You must remember that the CIS Tax information has been sent to HMRC.