CIS income

To match your Construction Industry Scheme (CIS) payments in QuickBooks Online, first turn on the CIS feature in your Account and settings. Once it is active, QuickBooks will automatically track your tax deductions (CIS Suffered) when you invoice your builders and match bank transactions.

Here is how to enable CIS functionality in your account:

1. Click the Gear icon and choose Account and settings.
2. Click the Advanced tab.
3. Find the Construction Industry Scheme (CIS) section and click Edit.
4. Turn on the switch to Enable CIS.
5. Enter your company's UTR no., Employer’s PAYE reference no., and Accounts Office reference no.
6. If you are a subcontractor, tick the I am a CIS subcontractor box and choose your tax rate.
7. Click Save.

For QuickBooks to apply deductions automatically, you must flag each builder as a contractor:

1. Go to All apps, then Customer Hub, then select Customers.
2. Click the builder's name, then select Edit.
3. Scroll to the Additional info section, tick the box for Is CIS Contractor.
4. Click Save.

When you invoice these builders, enter your normal full amounts. QuickBooks will handle the tax deduction calculation at the bottom of the document:

1. Go to +Create and select Invoice.
2. Choose your contractor from the Add Customer dropdown list.
3. In the Product/service column, select your standard labor or materials items and enter the full price before tax.
4. Look at the bottom of the invoice. QuickBooks will automatically calculate and display the CIS deduction, showing the lower net amount the builder actually owes you.
5. Click Save and close or Review and send.

Because the builder pays you the net amount, the bank feed will not automatically find a match. You must link them manually:

1. Go to All apps, select Accounting, and click Bank transactions.
2. Locate the incoming payment from your contractor under the Pending tab.
3. Click the transaction to expand it, and select the Find Match option.
4. Tick the checkbox next to the correct invoice from the list.
5. QuickBooks will recognize that the bank payment matches the net amount of the invoice and will automatically assign the missing difference to your CIS Suffered account.
6. Click Save or Match.

Once matched, QuickBooks marks your invoice as fully paid, clears your bank feed, and logs the tax paid into your CIS reports so you can easily reclaim it on your tax return.

For more details, check the official guide on Setting up CIS payments and returns.

Let us know if you have additional questions.