Please someone explain how I can create an invoice to have the 20% CIS TAX deducted from the Labour TOTAL rather than 20% being added
hi zekeb007 did you find a solution as I'm having the same issue
Hi @davidwhite136 @zekeb007 . Can you explain to me the use case or your work flow as to why you would want the tax to be deducted from the total amount being charged?
Hi @davidwhite136 @zekeb007 thanks for your patience. I've been working through this with my team this morning and on the advice of our Product Manager who is most experienced with the ins-and-outs of tax regulations in the UK, I'm going to recommend talking to an accountant or bookkeeper in your region. (One of our members might be able to help.) There isn't a feature in Wave that is specifically suited to this requirement. Given the tax implications, risk of penalty, and so on, I don't want to advise a workaround that could create problems for you in the long run. I'm sorry for the time it took to get you a response. If we can help with anything else, please don't hesitate to ask.
Hi @masoncarpentry . Thanks for your input and feedback on this. It's valuable for us to know exactly how this applies to your business - and in this case the UK construction industry - as it provides us with more insight into adding this feature and how it would help. With this being said, I can't guarantee that this feature will be implemented, but your suggestion of adding a minus in front of the tax option would definitely be a great solution for it. I'll pass your feedback along to the team.
I m yet another UK Construction industry member who would love to see this ' minus' option,
At this moment I need to shift to Quickbooks to be able to rise CIS invoices!
I dont think they care though,still not enough voices I suppose!!!
Hey @Spaceart , we definitely do care! Your feedback is valued and not going unnoticed.
Well Zoe,talk is cheap...
Why then nothing has been done from 29 of January where the issue was raised first?
Its more than 4 months now...
As I mentioned in another similar thread, we need the ability to create a new tax ourselves in the negative (it would essentially be minus 20% as opposed to plus 20%)
I would think a simple minus (-) figure in their algorithms would also be helpful when adding a prompt payment discount/early settlement discount to the invoice which I cannot find a way to do?
Possible requires a new thread/topic...
The CIS deduction isn't an actual deduction from your invoice value but rather a deduction from the amount being paid to you in settlement of your invoice. You should not therefore be trying to tweak your invoices to show this. What you need to do is match the payment received against your invoice, leaving a 20% balance outstanding. Then, using (for example) the cash account, enter the CIS tax first as if it is a payment for your invoice, and then entering a payment in your cash account and allocate that to your Balance Sheet under perhaps Current Assets with a new heading called CIS deductions. If you are offsetting against PAYE deductions/CIS deductions made by you from staff/sub-contractors you should put it under liabilities with your PAYE deductions so that it naturally offsets against these.
Similar system exist in Spain: it's not called CIS, and is not limited to the construction industry.
Here, we have IRPF, which is a retention. (it has a negative percentage)
So for instance, when you rent an office, say the agree rent is 1000€.
The invoice should be as:
Rent = 1000 €
+ VAT (21%): +210€
- IRPF (19%): -190€
First, when creating a new [sale] tax, it is not allowed to enter a negative %. So that doesn't work.
Then I've tried to create a sales product/item called retention, entered manually the amount (-190€), but then the minus sign doesn't appear on the invoice!! Instead, it shows: (190€)!!!
CIS tax isn't actually a retention. CIS tax is an amount that a contractor deducts when paying the sub-contractors invoice and which has to be paid over to HMRC by the contractor. The sub-contractor doesn't (shouldn't) raise an invoice for earnings less CIS tax, but for earnings only - they are not required to self deduct the tax.
With regard to your illustration, are you saying that in Spain the landlord is required to deduct the tax on the actual invoice before giving the bill to the tenant? So the tenant only pays a net of tax rental fee?
The invoice must show:
IRPF (retention) amount.
The amount due to be paid is then:
Then the tenant, at the end of each quarter, has to pay all IRPF amounts to the tax authorities "on behalf of the landlord".
same principle applies for employers paying a salary to their employee.
They deduct a retention and pay it to the tax authorities at the end of each quarter "on behalf of the employee".