We’re constantly talking to accountants and bookkeepers to ensure that we properly understand your challenges, and can build solutions that make the way you work with sole traders as easy and efficient as possible.
One thing that we hear about on a regular basis—and from accounting practices of all sizes—is the need for accounting software to support subcontractors on the Construction Industry Scheme.
In general, CIS subcontractors tend to have a higher likelihood of using an accountant for two main reasons. For one thing, being on the scheme often makes their accounting more complicated than it may be for other sole traders. For another, subcontractors can often get tax rebates by filing taxes early, and therefore are more likely to enlist the help of an accountant to help them do so.
With that in mind, we’re delighted to announce that this week, we’re launching brand new functionality that will make it easy for accountants and their subcontractor clients to manage their finances using Coconut.
How it works:
Our new feature makes it easy for subcontractors and their accountants to add back CIS deductions in a couple of clicks, meaning that you and your client can keep track of their gross turnover and any tax withheld for CIS all year round:
- Open the Coconut Portal and head to your subcontractor client’s account.
- In the Bookkeeping tab, click on the relevant transaction and select ‘Add back CIS deduction’.
- When you do so, Coconut will automatically add the adjustments to gross up the income and record the tax withheld. The default adjustment will be 20%, but you can change this if necessary.
This will make the turnover and profit figures that your client sees in the app more accurate, when their tax return is due, you can run our SA103S report for the tax year to get the figures for total turnover as well as the CIS tax withheld.
The road to Making Tax Digital for ITSA
Data shows that one million extra sole traders would be willing to pay for accounting services to support them with Making Tax Digital for ITSA, creating a potential £360 million opportunity for the industry.
And at Coconut, we want to help accountants and bookkeepers unlock that major growth opportunity by building features that make working with sole traders highly efficient.
Supporting subcontractors is a major part of that. At present, there are around one million CIS subcontractors in the UK who have tax withheld in their weekly or monthly pay—and any of these individuals who earn over £10,000/year will have to comply with the MTD ITSA rules when they come into effect in April 2024.
As such, this development is a key step towards ensuring that our MTD ITSA software supports the whole of the UK’s sole trader community.
But it doesn’t stop there. Our plan is to provide accountants with one platform for managing all sole traders that are required to comply with MTD ITSA; keep your eye out over the coming weeks for more updates around how we plan to support accountants whose clients have multiple income streams.
Try it for yourself
Already a Coconut Partner?
For more information on how our new CIS features work, book a call with us so we can talk you through them in more detail and help you onboard your CIS clients in minutes.
You can also find more information about how to manage your CIS clients here.
Not a Coconut Partner yet?
Don’t forget that you can sign up for a Coconut Partner Account for free, meaning that you can explore the Coconut Portal at your leisure, and see for yourself just how easy Coconut will make working with your sole trader clients—now including subcontractors.