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  1. CIS deduction after retention - subcontractor invoices

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    submitted  ·  4 comments  ·  For small businesses » Accounting features  ·  Admin →
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    Scott Lumgair commented  · 

    Currently it is not possible to correctly account for retentions on invoices as Xero only calculates CIS on values coded to "CIS Labour Expense".

    Therefore meaning that the retention element also needs to be coded to "CIS Labour Expense" for the CIS to be correctly calculated. This results in an understatement of CIS Labour Costs and understatement of retentions in the balance sheet of the same value.

    Our workaround is that for each subcontractor invoice with retention posted we need to post a manual journal to increase CIS Labour Expenses (debit) and increase retention liabilty (credit). But when you have a large volume of subcontractor invoices is very time consuming.

    Xero should be add a "CIS Retentions" balance sheet code which also allows CIS deductions to be calculated on it after retentions.

    I have seen this issue on various forums for years but Xero has done nothing with it.

    Scott Lumgair supported this idea  ·