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CIS - File for overpayments allocated to a CIS invoice

Yes that's right. Let's say you pay a subby £150 in advance and allocate that as an overpayment on their account from the bank feed. You then get an invoice from them a couple of weeks later for £500 and deduct CIS of £100 leaving £400 outstanding. You allocate the overpayment from the account of £150 and pay your subby the balance of £250. The system will only declare CIS on the £250 element of what you have paid. You have to know an overpayment has been allocated, reverse it and allocate the payment directly to the invoice for it to be able to declare the CIS correctly. Xero say this is not a problem and it is working as designed. Why on earth you'd design it that was is beyond me. I'd like to see the CIS paid across when the overpayment is allocated.

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Lisa Lines shared this idea  ·   ·  Report…  ·  Admin →
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  • Kraig Chapman commented  ·   ·  Report

    Prepayments and Overpayments to be included on both CIS monthly returns and CIS Suffered reports.

    Currently I have just learnt that if you post a customer receipt or subcontractor payment to the sales or purchase ledger as overpayments or prepayments, then match these to the sales invoice or subcontractor invoice at a later date they do not pull through to the CIS reports. Instead you need to find the overpayments posted remove and redo and then allocate them.

    I was unaware of this which has meant submission to HMRC have been incorrect on CIS suffered as contractors do not always pay what has been invoiced.

  • Becky Jeffery commented  ·   ·  Report

    This is imperative to working out the correct CIS, especially when it comes to CIS reclaims from HMRC. After completing the reconciliation, my balance was out and couldn't see why, it was down to the overpayments!!

  • Katie Hackling commented  ·   ·  Report

    CIS should be paid on the total paid to a subcontractor. Currently no CIS is declared on Xero's CIS reporting either when the overpayment is made or when it is allocated.
    this needs sorting out!

  • Jessica Abrahams commented  ·   ·  Report

    I've just had this!! I have an absolute love hate relationship with CIS on Xero- it could be so good but annoying things like thing make it poor.