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[IMP] Fiscal Localizations: Add CIS deduction info for UK

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task-4341297

closes odoo/documentation#11451

Signed-off-by: Anne-Françoise Marcq (afma) <afma@odoo.com>
This commit is contained in:
afma-odoo 2024-11-20 11:30:42 +01:00
parent d4564632c3
commit f4d64763c0
2 changed files with 183 additions and 10 deletions
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2
content/applications/finance/fiscal_localizations/employment_hero.rst
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@ -38,7 +38,7 @@ Configuration
:ref:`Malaysia <malaysia/employment-hero>`,
:ref:`New Zealand <new-zealand/employment-hero>`,
:ref:`Singapore <singapore/employment-hero>`,
and the :ref:`United Kingdom <united-kingdom/employment-hero>`.
and the :ref:`United Kingdom <localization/united-kingdom/employment-hero>`.
- You can find the **Business ID** in the Employment Hero URL. (i.e., `189241`)

191
content/applications/finance/fiscal_localizations/united_kingdom.rst
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@ -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 <https://www.gov.uk/government/organisations/hm-revenue-customs/>`_
- `Overview of Making Tax Digital
<https://www.gov.uk/government/publications/making-tax-digital/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
<https://www.odoo.com/slides/slide/tax-report-and-return-1719?fullscreen=1>`_.
.. _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
<https://developer.service.hmrc.gov.uk/api-test-user>`_.
.. _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 <uk_localization/hmrc-registration>` and submit
the tax report for this company.
#. :ref:`Register your company to HMRC <localization/united-kingdom/hmrc-registration>` 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 <united-kingdom/modules>`
module is installed, then:
To enable the use of Bacs files, make sure the
:ref:`UK BACS Payment Files <localization/united-kingdom/modules>` 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 <employment_hero/configuration>` 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) <https://www.gov.uk/what-is-the-construction-industry-scheme>`_
- `Guidelines for CIS contractors
<https://www.gov.uk/what-you-must-do-as-a-cis-contractor>`_
- `Guidelines for CIS subcontractors
<https://www.gov.uk/what-you-must-do-as-a-cis-subcontractor>`_
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 <general/install>` the
:ref:`UK - Construction Industry Scheme <localization/united-kingdom/modules>` module.
.. tip::
To enable the :guilabel:`Test` mode and use test credentials, open the Settings app, activate the
:ref:`developer mode <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 <localization/united-kingdom/cis-subcontractor-setup>`'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-subcontractor-setup>`.
.. _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 <localization/united-kingdom/cis-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|.