CIS Accountants

Accountants for the Construction Industry Scheme

The Construction Industry Scheme (CIS) has strict rules for both contractors and subcontractors, and getting the deductions wrong is costly. Accutax Services helps construction businesses across the UK stay compliant, file on time, and — for many subcontractors — reclaim the tax they've overpaid.

From sole-trader subcontractors to contractors managing a workforce, we handle the whole scheme remotely, wherever you're working.

How CIS Deductions Work

Under CIS, contractors deduct money from payments to subcontractors and pass it to HMRC. The deductions are advance payments towards the subcontractor's tax and National Insurance. The rate depends on the subcontractor's status:

• 20% if the subcontractor is registered for CIS
• 30% if they are not registered
• Nothing deducted if they hold gross payment status

Deductions apply to the labour part of a payment, not to materials the subcontractor has bought for the job, so invoices need to show materials separately. Errors here are one of the most common reasons subcontractors pay too much tax during the year.

For Contractors: Verification and Monthly Returns

Before paying a new subcontractor, you need to verify them with HMRC, which tells you which rate to deduct. Each month you must give subcontractors a payment and deduction statement and file a CIS return by the 19th of the following month, covering the tax month from the 6th to the 5th.

Late returns attract a £100 penalty after one day, rising to £200 after two months and to the higher of £300 or 5% of the deductions after six months, with further penalties after twelve months. A nil return or an inactivity notice is needed for months with no payments. We handle verification, statements and returns, and fit them around your bookkeeping and payroll.

For Subcontractors: Getting Your Money Back

Because 20% is taken from your labour before you have claimed any expenses or your personal allowance, many sole trader subcontractors pay more than they owe. You claim it back by entering your gross pay and CIS deductions on your self assessment tax return, together with your business expenses such as tools, work clothing, vehicle costs and insurance. HMRC then repays the difference.

Limited company subcontractors work differently. Deductions are set against the company's monthly PAYE bill through its payroll submissions, and any balance at the end of the tax year can be reclaimed from HMRC. Claiming them on the corporation tax return instead can lead to a penalty, so it is worth getting right. Our tax returns service covers both.

Gross Payment Status

Gross payment status means contractors pay you in full and you settle your tax later, which helps cash flow. To qualify you need a record of paying tax and National Insurance on time, a construction business run through a bank account, and turnover (excluding VAT and materials) of at least £30,000 a year as a sole trader, or £30,000 per partner or director (or £100,000 in total) for a partnership or company. HMRC reviews the status, so late filing or payment can lose it. We check whether you qualify and make the application.

VAT Reverse Charge

Many supplies of building and construction services between VAT-registered businesses fall under the domestic reverse charge, where the customer accounts for the VAT rather than the supplier. It changes how invoices are written and how VAT returns are completed. We set up your invoicing and returns correctly. See our pricing or book a call to discuss your business.

CIS Accountant FAQs

The information on this page is general guidance only and does not constitute tax advice for your specific circumstances.

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