Enterprise Resource Planning Blogs by SAP
Get insights and updates about cloud ERP and RISE with SAP, SAP S/4HANA and SAP S/4HANA Cloud, and more enterprise management capabilities with SAP blog posts.
cancel
Showing results for 
Search instead for 
Did you mean: 
JohnMeadows
Product and Topic Expert
Product and Topic Expert
In the United Kingdom, principle contractors in the Construction Industry can manage their subcontractors and the payments via the Construction Industry Scheme. Details on the scheme can be read here. Business ByDesign supports the financial part of the CIS process for Contractors.

Confirm Business Configuration:


From the Business Configuration Work Center Edit project scope and navigate to Section 4 - Questions. From here select Cash Flow Management > Tax Management > Tax Filing



Set up Tax Arrangements:


The company/contractor needs to have the Withholding Tax Arrangements set up.



Vendor Masterdata.


When you add a subcontractor to your Supplier Base in ByDesign, there are two sections you *must* complete to ensure CIS Compliance.

  1. Ensure the Subcontractor is valid by obtaining the verification from HMRC.  and enter the returned verification number on the tax details tab of the supplier record

  2. Enter the CIS tax arrangements in the lower box of the Tax Details for the Vendor:What is really important here is that you *DO NOT* add data to the Drop Down List "Withholding Tax Income Type" leave it BLANK


Supplier Invoice:


Now when you enter a supplier invoice for this supplier/SubContractor, the invoice will automatically calculate the Withholding Tax for Services Only. Materials are not subject to WHT under CIS and so no WHT is calculated.




Vendor Payment:


Once the invoice is posted and ready for payment, ByDesign will automatically calculate the payment amount. In Line with HMRC Rules


With the WHT posted automatically



Tax Return:


From the Tax Management Work Center, a Withholding Tax Return Run should be created for Tax Arrangement "UK_WITHHOLDING". This will then provide the data that needs to be reported to HMRC.


SAP has recently supplied another Tax Return Arrangement, "GB_WITHHOLDING_NEW" which you should run no later the 14 days after payment to your supplier/sub contractor. This is known as the Vendor Statement - and details payments and deductions.


I hope this helps everyone understand how ByDesign can support businesses using CIS within their organisation.

 
4 Comments