Understanding Setup for CIS Processing
This chapter provides an overview of setup for Construction Industry Scheme (CIS) processing and discusses how to:
Enter address book information for subcontractors.
Set up CIS system constants
Set up CIS company constants.
Note. After you install the programs for the construction industry scheme that is in effect beginning April 2007, your system will display two menu structures; one for the new scheme and one for the scheme that you use for transactions prior to April 2007. To access the programs for the new scheme, use the G74U04xx menus. Use the G74U02xx menus to access programs for the previous scheme.
See Also
Understanding Setup for CIS Processing
To set up the system for CIS processing, you must:
Set up these category codes:
An address book category code (01/01–30) to identify subcontractors.
An account category code (09/01–23) to identify GL accounts that fall within CIS.
The system uses the values that you set up in the category codes when you set up CIS constants.
Use the CIS Constants program (P74U0100) to set up CIS constants.
Update the Account Master record with the category code values that you specify on CIS Constants for all GL accounts that fall within the CIS.
See Revising Accounts.
You must update the Account Master record after you set up the CIS constants.
Set up two address book records for suppliers for whom you want to include only selected vouchers when you process CIS vouchers. Set up one address book records with the subcontractor category code value and one without it. For example, you might label the suppliers Supplier 1 - CIS and Supplier 1 - No CIS.
Set up this information for companies before you set up CIS company constants:
Set up the company in the Companies program (P0010).
See Setting Up Companies.
Set up the company’s mailing address in the Address Book Revisions program (P01012).
Set up CIS company constants by using the CIS Company Constants program (P74U0101).
Set up your subcontractors:
Set up address book records for subcontractors using a search type of S (subcontractors) or V (suppliers) and the category code that you set up in the CIS System Constants program (P74U0100) to identify them as subcontractors.
Enter CIS-required address book information by using the Address Book Additional Information program (P74U4010).
Set up a supplier master record for each subcontractor for which you set up an address book record.
On the Tax Information tab of the Supplier Master Revision form, specify the address book number for Inland Revenue in the Tax Authority field.
Enter the withholding percentage for deductions in the Subcontractor Verification Status program (P74U4020).
Prerequisite
Before completing the tasks in this chapter, verify that the Localization Country Code field in the User Profile Revisions program (P0092) is set to UK (United Kingdom).
Entering Address Book Information for Subcontractors
This section provides an overview of the information required for subcontractors and discusses how to enter address book information for subcontractors.
Understanding Required Information for Subcontractors
In addition to the standard information that you enter for suppliers, when you set up address book information for subcontractors:
Set up address book records for subcontractors using a search type of S (subcontractors) or V (suppliers) and the category code that you set up in the CIS System Constants program (P74U0100) to identify them as subcontractors.
Set up a supplier master record for each subcontractor for which you set up an address book record.
On the Tax Information tab of the Supplier Master Revision form, specify the address book number for the Inland Revenue Service in the Tax Authority field.
Enter additional address book information for subcontractors in the Address Book Additional Information program (P74U4010).
The system launches the Address Book Additional Information program automatically when you click OK or Regional Info on the Address Book Revisions form and your user preference is set to UK (United Kingdom). The system saves the information that you enter to the CIS Address Book (F74U4010) and the F74U4015 tables.
Legal Subcontractors and Trade Subcontractors
You might need to set up more than one supplier as a single subcontractor. When you need to generate purchase orders, vouchers, and payments to more than one supplier for a single subcontractor, you can associate a trade subcontractor to a legal subcontractor. The legal subcontractor is registered with the HMRC; the trade subcontractor is not registered.
For example, suppose ABC Subcontracting Company is registered with the HMRC. A UTR, company registration number, and National Insurance Number (NINO) exists for ABC Subcontracting. Suppose further that ABC Subcontracting has a branch office (ABC North) that supplies some of the labor for projects. In this scenario, you would:
Set up both companies as suppliers.
Create a record for ABC Subcontracting Company by entering the UTR, company registration number, and NINO in the Address Book Additional Information program.
Associate ABC North to ABC Subcontracting Company in the Address Book Additional Information program by:
Entering the address book number for ABC North in the SubContract Number field, and;
Completing the Legal Subcontractor field with the address book number of ABC Subcontracting Company.
When you complete the Legal Subcontractor field, the system disables the subcontractor information fields, including the UTR, CRN, Acting For, Business Type, and NINO.
System Validations
The system validates the following information in the Address Book Additional Information program:
UTR
The system uses a validation routine to verify that the first digit is a check digit and that the first digit is followed by 9 numeric digits.
Company registration number
This number can be in the format of AANNNNNN, where A is an alpha character and N is a numeric character, or it can be in the format of NNNNNNNN, where N is a numeric character. At least one character must be numeric, but no more than the number of numeric characters allowed by the format.
NINO
The system validates that the format is AANNNNNNA, where A is an alpha character and N is a numeric character. The first alpha character must other than D, F, I, Q, U, or V. The second alpha character must be other than D, F I, O, Q, U, or V. The last character must be A, B, C, D, or blank.
Subcontractor business type
Assign a value from the 74U/SB UDC table to identify the business type of the subcontractor.
Forms Used to Enter Additional Address Book Information
|
Form Name |
FormID |
Navigation |
Usage |
|
Address Book Revisions |
W01012B |
Daily Processing (G0110), Address Book Revisions Click Add on the Work With Addresses form. |
Complete address book information for the subcontractor. |
|
Subcontractor Information |
W74U4010A |
Click OK on the Address Book Revisions form. |
Complete the required CIS information for the subcontractor, including the Unique Tax Reference number, the National Insurance Number, and the Company Registration Number. You also use this form to specify whether the subcontractor is a legal subcontractor (registered with the HMRC) or a trade subcontractor. |
Entering Additional Address Book Information for Subcontractors
Access the Subcontractor Information form.
|
Legal SC (legal subcontractor) |
When creating a record for a trade subcontractor, enter the address book number of the company that is the legal subcontractor for the trade subcontractor. When you complete this field, the system disables the remaining fields on the Subcontractor Information form. |
|
Unique Tax Reference |
Enter the 10-character tax reference number. |
|
National Insurance Number |
Enter the subcontractor’s national insurance number in the format of AANNNNNNA, where A is an alpha character and N is a numeric character. The first alpha character must other than D, F, I, Q, U, or V. The second alpha character must be other than D, F I, O, Q, U, or V. The last character must be A, B, C, D, or blank. |
|
Company Registration Number |
Enter the 8-digit company registration number. The number you enter must include at least one numeric character. |
|
SC Business Type (subcontractor business type) |
Enter a value from the 74U/SB UDC table to specify the business type of the subcontractor. Values are:
|
|
Acting For |
Enter the name of the employee who acts for the subcontracting company, such as an accountant who receives payment on behalf of the company. |
Setting Up CIS System Constants for Great Britain
This section provides an overview of CIS system constants, lists a prerequisite, and discusses how to set up CIS constants.
Understanding CIS System Constants
CIS system constants provide the basic framework for how the CIS operates for your business needs. These parameters enable you to:
Specify the effective date of the CIS scheme used.
Activate the scheme.
Define how to identify subcontractors within the scheme.
Define which GL accounts fall within the scheme.
Provide system process default values.
Important! After you set up CIS System Constants, you must update the Account Master record with the category code value that you specify on CIS Constants for all GL accounts that fall within the CIS. You must also update the address book records with the category code value that you specify on CIS Constants for all subcontractors within the scheme.
Prerequisite
Set up these category codes:
An address book category code (01/01–30) to identify subcontractors.
An account category code (09/01–23) to identify GL accounts that fall within CIS.
See Also
Entering Supplier Master Information
Form Used to Set Up CIS System Constants
|
Form Name |
FormID |
Navigation |
Usage |
|
W74U0100B |
System Setup (G74U0440), CIS System Constants |
Set up CIS constants. Activate the Construction Industry Scheme. |
Setting Up CIS Constants
Access the Construction Industry Scheme Constants form.
CIS System Constants
|
Activate Construction Industry Scheme |
Select this check box to activate the scheme. |
|
CIS Default Pay Status |
Enter a code from the Payment Status Code (00/PS) UDC. The system uses the code that you enter as the default pay status for CIS subcontractor vouchers that are entered through Voucher Entry (P0411), Speed Voucher Entry (P0411SV), or Voucher Match (P4311). |
Address Book Category Code
|
A/B Category Code (address book category code) |
Select one of the address book category codes to identify CIS subcontractors. This option is used in conjunction with the Designated Flag A/B field. |
|
Designated Flag A/B (designated flag address book) |
Specify the value that exists in the category code you selected in the A/B Category Code field that indicates that a subcontractor is subject to CIS. |
Object Account Category Code
|
O/A Category Code (object account category code) |
Select one of the object account category codes to identify taxable GL accounts that are used to pay CIS subcontractors' labor. This field is used in conjunction with the value in the Designated Flag O/A field. |
|
Designated Flag O/A (designated flag object account) |
Specify the value that exists in the category code that you selected in the O/A Category Code field that identifies the taxable G/L accounts that are used to pay CIS subcontractors' labor. |
CIS Update
|
Effective Date From |
Enter the date of the scheme that takes effect in 2007 to use the processing logic that applies to that scheme. To use the scheme that is in effect prior to the new, 2007 scheme, do not enter a date for this constant. |
|
CIS End Period Day |
Enter the day on which the reporting period ends. For example, if the reporting period ends on the 5th day of the month, enter 5. |
Setting Up CIS Company Constants
This section provides an overview of the CIS company constants, lists prerequisites, and discusses how to set up CIS company constants.
Understanding CIS Company Constants
Use CIS Company Constants (P74U0101 ) program to enter this information about the contractor:
CIS tax reference number
Unique tax reference (UTR)
Tax office number
Account office reference (AORef).
The UTR consists of a check digit followed by 9 numeric digits. The system validates the first character of the UTR.
The AORef that you enter must be in this format:
Characters 1, 2, and 3 are numeric.
Use leading zeros (0) to complete the 3 characters, if necessary.
Character 4 must be the letter p.
Character 5 must be alpha.
Characters 6–13 must be numeric.
Use leading zeros (0) to complete these characters, if necessary.
The system validates the requirements for the characters entered for the AORef.
The system saves data about the CIS company constants to the CIS Company Constants (F74U0101) table and the CIS Company Constants 2007 Update (F74U0111) table.
Prerequisites
Before you complete the tasks in this section:
Set up the company's mailing address in the Address Book Revisions program (P01012).
Set up the company in the Companies program (P0010).
See Also
Forms Used to Set Up CIS Company Constants
|
Form Name |
FormID |
Navigation |
Usage |
|
Work with CIS Company Constants |
W74U0101A |
System Setup (G74U0440), CIS Company Constants |
Review and select existing records. |
|
CIS Company Constants Revisions |
W74U0101B |
Click Add on the Work with CIS Company Constants form. |
Enter reference numbers for the contractor. |
Setting Up CIS Company Constants
Access the CIS Company Constants Revisions form.
|
Contractor Tax Reference |
Enter the contractor's unique 13-character CIS tax reference. |
|
Unique Tax Reference |
Enter the 10-character tax reference number. |
|
Tax Office Number |
Enter the 3-character tax office number. |
|
Tax Office Reference |
Enter the tax office reference. |