Construction accountants for UK contractors.

Construction accountants run the Construction Industry Scheme alongside the normal accounts: verifying subcontractors with HMRC, deducting 20 or 30 per cent from the labour element of each payment, filing the monthly return by the 19th, and issuing payment and deduction statements. Everything else, from VAT to job costing, is built on top of that.

Construction is the one UK sector where the tax authority takes money out of your revenue before you have earned it. A subcontractor invoicing 30,000 pounds of labour a month receives 24,000 pounds, and the 6,000 pound difference sits with HMRC until a reclaim is processed. That is a working capital cost rather than a tax cost, and it is why profitable trades run out of cash.

We work with main contractors, groundworkers, electrical and mechanical firms, fit-out specialists, scaffolders, plant hire businesses and property developers acting as contractors. Most are contractor and subcontractor at once, running two sets of obligations in the same month. Several are deemed contractors that never thought of themselves as construction businesses at all, caught by the 3 million pound spend test.

The scheme is set out in HMRC's CIS 340 guide, and our own CIS scheme explained walkthrough covers the mechanics in detail. Where you engage workers through their own limited companies, the off-payroll rules sit on top of CIS, which we cover in the IR35 guide for contractors.

By moving 20 per cent of every labour invoice out of your bank and into HMRC's. How you get it back depends on your structure. A limited company claims deductions each month on the Employer Payment Summary and sets them against PAYE, National Insurance and its own CIS liabilities, so the money returns within weeks. A sole trader or partnership waits for the Self-Assessment return, which can mean a fourteen month gap between deduction and repayment.

That structural difference is worth modelling before you incorporate rather than after. It is also the most common reason we find unclaimed CIS credits sitting in an HMRC account: companies that never filed an Employer Payment Summary, sometimes for two or three years, with a five figure balance nobody knew was there. We check for it on every new construction client. Our Self-Assessment filing service handles the sole trader claim and our multi-jurisdiction payroll service handles the company one.

The VAT domestic reverse charge for building and construction services removed a second float in March 2021. Subcontractors no longer hold customers' VAT between quarters, which for many businesses had been a permanent interest-free loan. Moving to monthly VAT returns usually recovers part of that position, and it is one of the first changes we make. The detail sits with our VAT and tax compliance service, and HMRC's technical position is in the VAT Construction manual.

Gross payment status removes the deduction entirely. Protecting it is a commercial priority rather than an administrative one, because it is reviewed annually against a compliance test that since 6 April 2024 takes in VAT obligations as well. One late VAT return can cost it. Lose it mid-job and every remaining invoice on work already priced and started becomes an 80 per cent payment. HMRC sets out the route at apply for gross payment status. Subcontractors trading in their own name rather than through a company will find the annual side covered on our sole trader accountants page. The wider scope we run for construction clients sits in our directory of accounting services.