Support for CIS in Xero
The Construction Industry Scheme (CIS) is a standardised taxation practice introduced in the UK by the HMRC. Xero’s API has exposed the new features in their Accounting API invoice endpoint which allowed Datamolino to bring CIS support to our accountants and businesses.
What is CIS?
Contractors and subcontractors in the UK construction industry are subject to special rules and regulations within the Construction Industry Scheme (CIS). This affects 245,000 construction companies and one million sub contractors. Under the scheme, contractors deduct money from a subcontractor’s payments and pass it directly to HM Revenue and Customs (HMRC).
Xero provides a seamless workflow for contractors, subcontractors and accountants involved in CIS to manage their obligations. Today, Datamolino has integrated with that workflow via the recently introduced Xero API functionality.
How does CIS work with Datamolino and Xero?
When you export a bill or invoice from Datamolino to Xero using contacts that have been setup for CIS, you will see the relevant CIS deductions calculated automatically in Xero. From user perspective there is nothing you need to do. Everything is seamless. Just export the documents using the correct CIS ledger codes and all the rest is handled during the export into Xero.
*Subcontractors will already be required to be set up within the Xero org. If this is not set up, then the relevant deduction will not be made automatically.
There is more info on the Xero blog.
Photo by Morgan Von Gunten on Unsplash