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
InTime allows you to show Construction Industry Scheme (CIS) deductions on Self Bill Invoices for CIS sub contractors. InTime uses InPay to manage the CIS deductions as it allows the appropriate HMRC submissions to be made. This feature is available to LTD Company Workers and Ltd Company Providers (Umbrellas)
The following conditions apply:
- Your InTime system must be integrated with InPay and have the Inpay Timesheet exporter selected.
- Other types of Invoice Adjustment should not be made through intime invoices - these should be done through timesheets or expenses.
Creating a CIS worker
When you create or modify a worker record in InTime the following options should be applied:
- Worker Type: LTD Company
- Ltd Company Provider: None
- Self Billing: Yes
- Pay Ltd Company As: Pay through InPay
- Payment Frequency: select a CIS enabled Payroll
- Use InPay for CIS: ticked
- Other mandatory InPay fields are also required: Gender, Date of birth, NI Number, date of Joining
- Enter the CIS Trading name and Business type.
- Select the CIS Deduction amount - see below
- You should also enter an Accounts Ref as this will be required in order to export the Self Bill invoices to your accounts system.
Please note Holiday Schemes are not applicable to CIS workers.
On saving the record the worker will be synchronised with InPay. On the workers details you should now see a numeric InPay ID. The worker can also be created via import or through a front end system but you will need to ensure that all the fields above are mapped and set correctly.
Creating a CIS Provider
When you create or modify a worker record in InTime the following options should be applied:
- Process CIS Through InPay: Ticked
- Pay Ltd Company As: Pay through InPay
- Payment Frequency: Select the appropriate Payroll - only CIS enabled Payrolls are available
- Enter the CIS Trading name.
- Enter the Providers Unique Tax Reference (UTR) if you have it - this will enable you to select a different deduction percentage.
- Select the CIS Deduction amount - see below
- Self Billing: Yes
- other mandatory InPay fields are set to defaults as they are not applicable to a company: Gender: Male, Date of birth: 1/1/1980, NI Number:NT000000A, Payroll Tax Code: NT, Date of Joining is set to the creation date of the Provider in InTime, Business type: Company.
- You should also enter an Accounts Ref as this will be required in order to export the Self Bill invoices to your accounts system.
Please note InPay Holiday Schemes are not applicable to CIS suppliers.
On saving the record the provider will be synchronised as an employee in InPay. The employee will have the provider's name as the surname and 'Company' as the forename. The Ref Code will be used as the Employee No. as usual. On the provider details in InPay you should now see a numeric InPay ID and the payment frequency will be disabled.
The Provider can be made a Leaver and re-instated as required using the normal process for a PAYE worker. This process must be also followed if the payroll needs to be changed.
CIS deduction rates
Available CIS deduction rates are as follows:
20% for registered subcontractors
30% for unregistered subcontractors
0% if the subcontractor has ‘gross payment’ status - eg they don’t have deductions made.
The default for a new CIS contractor is the higher rate 30%. This can only be altered in InTime if the worker is already CIS registered - in order to do this you must enter the Unique Tax Reference (UTR). Once the record is created and synchronised with InPay changes to the Deduction rate can only be done in InPay.
Pay/Invoicing
Create and approve timesheets and expenses for the worker/provider in the normal way.
Export the timesheets and expenses to InPay via the Export screen.
Timesheets for all workers associated with a CIS Provider will be exported to a single record in InPay all workers under that provider
At the appropriate time commit the relevant CIS Payroll periods in InPay.
Synchronise the payslip data with InTime: Administration -> Synchronise Payslips. This step can take a while - you will receive a notification when the process is complete.
To generate the invoices:
Go to "Invoicing -> Self Bill -> Generate CIS Invoices".
Select the required CIS payroll and appropriate payroll period - normally the most recent.
* If the required payroll is not available make sure it is set up as a CIS payroll and your InPay connection is working.
* If the required period is not available check you have committed the payroll in InPay and then synchronised the payslip data.
Apply any other relevant filters and click search.
Each invoice preview returned should include an Adjustment line for the appropriate CIS deduction amount.
Select, preview and generate the required invoices.
If the CIS deduction amount was not found on the selected pay period there will be a validation error shown with the Invoice.
Only workers/providers with a 20% or 30% Deduction rate will have deductions added to their invoices.
Normally the workers UTR and CIS Verification number should be shown on the invoice. This can be done with an Invoice template - please contact InTime support for assistance with setting up an invoice template.
Payment
It is possible to make payment to the CIS workers either from InTime or InPay but we would normally recommend making payment from InTime by generating a BACS payment file for the CIS Self Bill invoices. You then do not need to generate BACS payment files for the CIS payroll in InPay.
HMRC monthly submissions will need to be made for the CIS workers from InPay. This is done from the Processing - HMRC Submission menu. Select the "CIS Monthly return" type.