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Construction Industry Scheme (CIS)

If you work in the UK construction industry then you probably need to comply with special tax rules and regulations within the Construction Industry Scheme (CIS).

CIS sets down rules for payments made by contractors to subcontractors. Alongside the standard self-assessment and VAT schemes, CIS is another scheme a business or sole trader must adhere to.

Capturing this information can be tricky. Luckily, Xero's created a new feature to help you make it easier – and Tradify works well with this new feature.

To take advantage of this, your first steps would be to sign up to Xero's CIS beta scheme. If you haven't already done so, or would like to know more, head over here.

Once you've configured the CIS feature in Xero, head back into Tradify and re-configure your integration settings. To do this, head into your Integration tab (via Settings) and click on the "Reset Settings" button. This will allow you to re-configure your accounts.

Once that's been completed, you'll be good to go.

Please note the following scenario, which could hinder you from sending Bills over to Xero:

If you're adding labour as a pricelist item to a Bill, and are using the Labour CIS as the account code for the line item on the bill, and you also have Inventory tracking switched on, when you try to send the Bill to Xero, it will fail. The reason for this is that Xero will assume the price list item to be a material cost, instead of it being a labour entry and it won't allow you to link the labour CIS code to materials.

The current workaround for this is to turn off Inventory Tracking or add the labour line item as a miscellaneous item.

Also, CIS is only related to costs, so please make sure that you don’t set this account code to your sales account in Tradify

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