CIS/RCT Setup
The CIS/RCT Setup is similar to the VAT posting setup:
• Type and period for the tax retention
• Posting setup for all combination of what you buy and from whom. The combinations are contained of various CIS/RCT Business and Product Posting Groups.
In addition to the CIS/RCT Setup, users are encouraged to configure online services, such as Monthly Return and Subcontractor Verification, by supplying essential credentials provided by HMRC data on the contractor registration.
Assisted setup
The CIS/RCT Assisted Setup Wizard in Business Central is designed to streamline the configuration of subcontractor withholding tax (CIS/RCT). This tool helps ensure that key tax-related settings are correctly configured, enabling companies to comply with regulations and automate the withholding tax process. The wizard guides users through the necessary steps to set up tax rates, posting groups, and general ledger (G/L) accounts. In addition, it offers the option to configure online submission to HMRC, providing a complete solution for managing CIS/RCT tax requirements.
Tip
You can use the CIS/RCT Setup guide only if you have created a My Company and haven’t posted transactions for CIS/RCT or set up vendors, items, resources, or accounts with CIS/RCT posting groups.To set up CIS/RCT using the assisted setup guide (recommended)
- Choose the 🔍 icon and enter Assisted Setup.
- Choose Set up CIS/RCT and complete the steps.
To set HMRC data
- Choose the 🔍 icon, enter CIS/RCT Setup, and then choose the related link.
- Under the HMRC Data fasttab is the data that you should provide as a contractor.
Required fields:
| Field | Description |
|---|---|
| Accounts Office Reference No. | This is 13 characters, like 123PX00123456 or 123PX0012345X. It will be on letters from HMRC about PAYE and when you registered as an employer. |
| Contractor UTR | This is 10 characters, like 1234567890. It might just be called ‘tax reference’. You can find your UTR number: in your Personal Tax Account, in the HMRC app, on previous tax returns and other documents from HMRC (for example, notices to file a return or payment reminders). |
| Tax Office Number | This is 3 characters, like 123. It is the first three digits of the Employer PAYE reference. If your Employer PAYE reference is 123/AB456 the the Tax Office number is 123. |
| Tax Office Reference | This is 5 characters, like AB456. It is the last five digits of the Employer PAYE reference. If your Employer PAYE reference is 123/AB456 the the Tax Office reference is AB456. |
| Sender ID | The user ID for the account used to log in to the HMRC online services. |
| Password Value | The password for the account used to log in to the HMRC online services. |
Tip
Under Related action group, you can find Field Formats, which help in validation of some required data for CIS submission. The character ‘#’ means that only numbers are allowed, ‘@’ that it must be alpha, while the sign ‘?’ means it can be alphanumerical. Validation for existing formats in the table, will be done automatically.CIS/RCT Tax Posting Groups
Configuring Posting Groups for vendors and products is crucial for accurate financial management, ensuring that deductions and settlements are appropriately recorded in the General Ledger.
- Choose the 🔎 icon, enter CIS/RCT Setup, and then choose the related link.
- Choose CIS/RCT Posting Groups, and then Posting Setup.
- Fill in the fields as necessary. Hover over a field to read a short description.
Tip
Don´t forget to setup all the combinations of the CIS/RCT Posting Groups.| Type | Description |
|---|---|
| Posting Setup | Set up the combinations of the CIS/RCT Business and Product Posting Groups, and choose the CIS/RCT and the G/L account for retention tax posting and settlement upon confirmation of tax authorities. |
| Business Posting Groups | Set up the codes to select on the vendor card for the use of retention tax, and for identifying each retention entry in the CIS/RCT Entries. |
| Product Posting Groups | Set up codes for CIS/RCT to be selected on item card, G/L account, resource and directly on the purchase lines, for identifying each retention entry. |
| Categories | Set up codes for different tax categories of labour or materials. The categories can be set on each product posting group and will be saved on the entries for reporting purposes. |
To set Business Posting Group on Vendors
- Choose the 🔎 icon, search for Vendors
- On the vendor list choose the vendor you want to set the business posting group for.
- Under CIS/RCT fasttab, set Use CIS/RCT to True.
- Choose the CIS/RCT Business Posting Group.
To set CIS/RCT product posting group for items, resources or G/L accounts
On all items, resources and G/L accounts that are used for purchase on vendors with tax retention, you can add a CIS/RCT Product Posting Group, that will be populated on the invoice line. If you are using the same g/l account for different kind of services, you can leave the CIS/RCT Product Posting Group blank and select it on the invoice line.
- Choose the 🔎 icon, enter Item or Resource or Chart of Accounts. Choose the related link.
- Under posting/invoice details, choose the CIS/RCT Product Posting Group.
CIS/RCT Periods
CIS/RCT Periods function similarly to VAT periods, providing a structured framework for managing and calculating retention taxes. Establishing these periods is crucial for further posting withing CIS/RCT Schema.
CIS/RCT Periods are created based on Starting Date, Period No. Series and Period Calculation Type in the CIS/RCT Setup.
- Choose the 🔎 icon, enter CIS/RCT Setup, choose the related link.
- Choose CIS/RCT Reporting, and then Return Periods.
- Click on Get Retention Tax Periods .