diff --git a/content/applications/finance/fiscal_localizations/employment_hero.rst b/content/applications/finance/fiscal_localizations/employment_hero.rst index 26d9ca946..746d44c38 100644 --- a/content/applications/finance/fiscal_localizations/employment_hero.rst +++ b/content/applications/finance/fiscal_localizations/employment_hero.rst @@ -38,7 +38,7 @@ Configuration :ref:`Malaysia `, :ref:`New Zealand `, :ref:`Singapore `, - and the :ref:`United Kingdom `. + and the :ref:`United Kingdom `. - You can find the **Business ID** in the Employment Hero URL. (i.e., `189241`) diff --git a/content/applications/finance/fiscal_localizations/united_kingdom.rst b/content/applications/finance/fiscal_localizations/united_kingdom.rst index 6e12dbebf..ce4c8ede0 100644 --- a/content/applications/finance/fiscal_localizations/united_kingdom.rst +++ b/content/applications/finance/fiscal_localizations/united_kingdom.rst @@ -2,7 +2,7 @@ United Kingdom ============== -.. _united-kingdom/modules: +.. _localization/united-kingdom/modules: Configuration ============= @@ -27,17 +27,28 @@ Reports` modules to get all the features of the UK localization. - Allows sending the tax report via the MTD-VAT API to HMRC. * - :guilabel:`UK BACS Payment Files` - `l10n_uk_bacs` - - Allows generating :ref:`united-kingdom/BACS-files` for bill and invoice payments + - Allows generating :ref:`localization/united-kingdom/BACS-files` for bill and invoice payments + * - :guilabel:`UK - Construction Industry Scheme` + - `l10n_uk_reports_cis` + - - Allows sending the Monthly return to |HMRC| + - CIS Deduction (GB) report for UK construction industry + * - :guilabel:`UK - HMRC API` + - `l10n_uk_hmrc` + - Includes the |HMRC| basics. .. note:: - Only UK-based companies can submit reports to HMRC. - Installing the module :guilabel:`UK - Accounting Reports` installs all two modules at once. + - The :guilabel:`UK - Construction Industry Scheme` module automatically includes the + :guilabel:`UK - HMRC API` module during installation. .. seealso:: - `HM Revenue & Customs `_ - `Overview of Making Tax Digital `_ +.. _localization/united-kingdom/chart-of-account: + Chart of accounts ================= @@ -48,6 +59,8 @@ Setup your :abbr:`CoA (chart of accounts)` by going to :menuselection:`Accountin --> Settings --> Accounting Import section` and choose to :guilabel:`Review Manually` or :guilabel:`Import (recommended)` your initial balances. +.. _localization/united-kingdom/taxes: + Taxes ===== @@ -66,6 +79,8 @@ Configuration --> Accounting: Taxes`. - Tutorial: `Tax report and return `_. +.. _localization/united-kingdom/digital-tax: + Making Tax Digital (MTD) ------------------------ @@ -82,7 +97,7 @@ The **UK - Accounting Reports** module enables you to comply with the `HM Revenu it through Odoo, as Odoo only retrieves open bonds from the last three months. Your submission has to be done manually by contacting HMRC. -.. _uk_localization/hmrc-registration: +.. _localization/united-kingdom/hmrc-registration: Register your company to HMRC before the first submission ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ @@ -91,6 +106,8 @@ Go to :menuselection:`Accounting --> Reporting --> Tax report` and click on :guilabel:`Connect to HMRC`. Enter your company information on the HMRC platform. You only need to do it once. +.. _localization/united-kingdom/periodic-hmrc-submission: + Periodic submission to HMRC ~~~~~~~~~~~~~~~~~~~~~~~~~~~ @@ -104,6 +121,8 @@ clicking :guilabel:`Send to HMRC`. the value line to `demo`. You can get such credentials from the `HMRC Developer Hub `_. +.. _localization/united-kingdom/periodic-hmrc-submission-multi: + Periodic submission to HMRC for multi-company ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ @@ -116,15 +135,15 @@ each submission: :guilabel:`Manage Users`. Select the user who is connected to HMRC. #. Go to the :guilabel:`UK HMRC Integration` tab and click :guilabel:`Reset Authentication Credentials` or :guilabel:`Remove Authentication Credentials` button. -#. You can now :ref:`register your company to HMRC ` and submit - the tax report for this company. +#. :ref:`Register your company to HMRC ` and submit + the company's tax report. #. Repeat the steps for other companies' HMRC submissions. .. note:: During this process, the :guilabel:`Connect to HMRC` button no longer appears for other UK-based companies. -.. _united-kingdom/BACS-files: +.. _localization/united-kingdom/BACS-files: Bacs files ========== @@ -132,8 +151,8 @@ Bacs files :abbr:`Bacs (Bankers' Automated Clearing Services)` files are electronic files used in the UK to process payments and transfers between bank accounts. -To enable the use of Bacs files, make sure the :ref:`UK BACS Payment Files ` -module is installed, then: +To enable the use of Bacs files, make sure the +:ref:`UK BACS Payment Files ` module is installed, then: #. Configure your Bacs Service User Number: @@ -154,6 +173,8 @@ module is installed, then: the :guilabel:`Accounting` tab, click :guilabel:`Add a line` and fill in the :guilabel:`Account Number` and :guilabel:`Bank` fields. +.. _localization/united-kingdom/bill-payments: + Bill payments ------------- @@ -179,6 +200,8 @@ Export File` if you need a new Bacs file for that batch payment. .. image:: united_kingdom/bacs-files.png :alt: Vendor Batch Payment view with generated BACS file. +.. _localization/united-kingdom/invoice-payments: + Invoice payments ---------------- @@ -216,7 +239,7 @@ Then, create a customer batch payment: Once validated, the Bacs file is available in the chatter. You can also :guilabel:`Re-generate Export File` if you need a new Bacs file for that batch payment. -.. _united-kingdom/employment-hero: +.. _localization/united-kingdom/employment-hero: Employment Hero payroll ======================= @@ -227,3 +250,153 @@ use our connector as an alternative payroll solution. .. important:: To :ref:`configure the Employment Hero API ` for **United Kingdom**, use the following value as :guilabel:`Payroll URL`: `https://api.yourpayroll.co.uk/`. + +.. _localization/united-kingdom/cis-deduction: + +.. |HMRC| replace:: :abbr:`HMRC (HM Revenue and Customs)` +.. |CIS| replace:: :abbr:`CIS (Construction Industry Scheme)` + +CIS deduction +============= + +The Construction Industry Scheme deduction (CIS deduction) is a tax deduction system used in the UK +designed specifically for the construction industry. It requires contractors to deduct a percentage +of payments made to subcontractors and forward these deductions to HM Revenue and Customs (HMRC). +These deductions apply only to the labor portion of the payments and serve as advance payments +towards the subcontractor's tax and National Insurance contributions. Contractors are required to +register for the scheme, but subcontractors are not. However, subcontractors who are not registered +face higher payment deductions. Under the |CIS|, contractors must deduct 20% from payments to +registered subcontractors, while the deduction increases to 30% for unregistered ones. + +.. seealso:: + + - `Construction Industry Scheme (CIS) `_ + - `Guidelines for CIS contractors + `_ + - `Guidelines for CIS subcontractors + `_ + +As a contractor, you are required to register with the |CIS| before hiring subcontractors and to +check whether each subcontractor is registered with the |CIS|. You must also maintain records of all +payments and deductions and submit monthly returns to HMRC, including the following details: + +- information about the subcontractors +- records of payments made and any deductions applied +- a declaration confirming that the employment status of all subcontractors has been reviewed +- a declaration confirming that all subcontractors requiring verification have been verified + +.. note:: + If no payments were made to subcontractors in the previous tax month, contractors must notify + |HMRC| by the 19th of the month to avoid a penalty. + +To submit Monthly Returns to |HMRC|, :ref:`install ` the +:ref:`UK - Construction Industry Scheme ` module. + +.. tip:: + To enable the :guilabel:`Test` mode and use test credentials, open the Settings app, activate the + :ref:`developer mode ` and go to :menuselection:`Settings --> Technical --> + System Parameters`. Search for `l10n_uk_hmrc.api_mode`, select it, and change the + :guilabel:`Value` from `production` to `test`. + +.. _localization/united-kingdom/cis-monthly-returns: + +Monthly returns +--------------- + +Monthly returns only work for vendor bills and vendor refunds. To submit a complete return to +|HMRC|, several steps must be followed to report all payments made to subcontractors under the +scheme during the previous tax month: + +- :ref:`localization/united-kingdom/cis-contractor-setup` +- :ref:`localization/united-kingdom/cis-subcontractor-setup` +- :ref:`localization/united-kingdom/cis-vendorbills` +- :ref:`localization/united-kingdom/cis-monthly-return-sending` + +.. _localization/united-kingdom/cis-contractor-setup: + +Contractor (company) setup +~~~~~~~~~~~~~~~~~~~~~~~~~~ + +To configure your company's |HMRC| information, go to the Settings app and, in the +:guilabel:`Companies` section, click :guilabel:`Update Info`. Open the :guilabel:`HMRC` tab and +configure the information in the :guilabel:`HMRC Credentials` and the :guilabel:`Contractor details` +sections. All fields are mandatory. + +.. _localization/united-kingdom/cis-subcontractor-setup: + +Subcontractor setup +~~~~~~~~~~~~~~~~~~~ + +Access the subcontractor's contact form and select the :guilabel:`Accounting` tab. In the +:guilabel:`HMRC Details` section, enable the :guilabel:`Construction Industry Scheme` option; the +|CIS|-related fields are displayed. + +By default, the :guilabel:`Deduction rate` is set to 30%. To modify it, first enter the +:guilabel:`Verification Number` provided by |HMRC| when verifying the subcontractor's status, then +update the :guilabel:`Deduction Rate` accordingly. + +.. note:: + The :guilabel:`Forename` and :guilabel:`Surname` fields are mandatory if the contact type is set + to :guilabel:`Individual`. + +.. _localization/united-kingdom/cis-vendorbills: + +Vendor bills +~~~~~~~~~~~~ + +The appropriate |CIS| tax must be applied to **labor items** on vendor bills based on the +subcontractor's :guilabel:`Deduction Rate`: :guilabel:`0% CIS`, :guilabel:`20% CIS` or +:guilabel:`30% CIS`. To apply the rate, go to the :guilabel:`Invoice Lines` section of the vendor +bill and select the appropriate |CIS| tax rate in the :guilabel:`Taxes` column of the **labor** +items. + +.. note:: + - The |CIS| tax rate is not necessary for material items on vendor bills. + - A yellow banner appears at the top of the page if: + + - The :guilabel:`Construction Industry Scheme` option hasn't been enabled in the + :ref:`subcontractor `'s + :guilabel:`Contact` form when creating a vendor bill. + - The |CIS| tax used in the vendor bill does not match the expected |CIS| deduction rate for a + :ref:`subcontractor `. + +.. _localization/united-kingdom/cis-monthly-return-sending: + +Monthly returns sending +~~~~~~~~~~~~~~~~~~~~~~~ + +On the 6th of each month, Odoo sends a reminder email to submit a monthly return to |HMRC|. The +recipient email address is the one entered in the company :guilabel:`Email` field. To send monthly +returns to |HMRC|, go to :menuselection:`Accounting --> Reporting --> Tax Return` and follow these +steps: + +#. Click :icon:`fa-book` :guilabel:`Report:` and select :guilabel:`CIS Deduction (GB)`. +#. In the :icon:`fa-calendar` :guilabel:`(calendar)` date selector, the :guilabel:`Tax Period` is + automatically adjusted to match the |CIS| deduction period. +#. Click on :guilabel:`Send to HMRC` in the top-left corner. +#. In the :guilabel:`CIS monthly return` window, select the required options in the + :guilabel:`Declaration` section: + + - :guilabel:`Employment Status`: To declare that the employment status of all subcontractors has + been reviewed. + - :guilabel:`Subcontractor Verification`: To declare that all submitted subcontractors requiring + verification have been verified. + - :guilabel:`Inactivity Indicator`: To declare temporary inactivity. + +#. In the :guilabel:`Information correct declaration` section, confirm the information is true and + complete by checking the box. Then, enter the :guilabel:`Password` used in the + :guilabel:`HMRC Credentials` section during + :ref:`contractor setup `. +#. Click :guilabel:`Send` to prompt Odoo to request |HMRC| to initiate the transaction. + +When |HMRC| replies to a transaction, Odoo automatically notifies the user who submitted it by +email. The email informs them that the response is available in the company's chatter with an +attached XML document for download. Both the electronic and paper versions of the |HMRC| receipt +should be retained. If an error is detected, a new submission is required to comply with |HMRC| +requirements. + +.. note:: + - Transactions are updated daily. To manually update the |HMRC| request, click the :icon:`fa-cog` + :guilabel:`(gear)` icon and select :guilabel:`Refresh HMRC request`. + - |CIS| invoices are included in the :guilabel:`CIS Deduction (GB)` report but are not sent to + |HMRC|.