CIS Accountants - Contractor & Subcontractor Experts
Specialist Construction Industry Scheme compliance, CIS refunds, and growth support for London's construction businesses. We handle your CIS returns, maximise your refunds, and keep you penalty-free.
What is CIS? (Construction Industry Scheme Explained)
The Construction Industry Scheme (CIS) is HMRC's tax deduction system for construction work. If you're a contractor paying subcontractors, or a subcontractor receiving payments, CIS affects you. Here's everything you need to know.
Who Are Contractors?
- Construction businesses paying subcontractors
- Must register with HMRC for CIS
- Verify every subcontractor before paying
- Deduct tax from subcontractor payments
- Submit monthly CIS300 returns (19th deadline)
- Pay deductions to HMRC (22nd deadline)
Who Are Subcontractors?
- Tradespeople working for contractors
- Must register with HMRC for CIS
- Receive payments with CIS deducted
- Get monthly payment statements
- Claim deductions back via Self Assessment
- Can apply for gross payment status
CIS Deduction Rates
- 20% - Standard registered subcontractors
- 30% - Unregistered or non-compliant
- 0% (Gross) - Gross payment status holders
- Deductions cover Income Tax + NI
- Applied to labour costs only (not materials)
- Claimed back through tax returns
Critical CIS Deadlines
19th of every month: CIS300 returns must be submitted to HMRC. Late submission = automatic £100 penalty (escalates to £300+ for repeated failures).
22nd of every month: CIS deductions must be paid to HMRC. Late payment = interest charges + potential tax-geared penalties up to 15% of unpaid amount.
CIS Challenges We Solve for London Construction Businesses
CIS compliance is complex and penalties are severe. We've helped 500+ construction businesses navigate these challenges. Here are the most common problems we solve.
❌ Gross Payment Status Applications
The Challenge: Applying for gross payment status requires meeting HMRC's compliance test, turnover test (£30K sole trader, £100K limited company), and business test. Most applications fail due to incomplete documentation or failing the compliance test.
How We Help: We review your eligibility, prepare complete documentation, ensure your tax affairs are compliant before applying, and handle the entire application process. Our success rate is 95% for eligible businesses.
✓ LOYALS Handles This❌ Maximizing CIS Refunds
The Challenge: Most subcontractors have 20-30% deducted from every payment, but their actual tax liability is typically much lower when expenses are factored in. Without claiming all allowable expenses, you leave thousands with HMRC.
How We Help: We identify every allowable construction expense (tools, materials, fuel, van costs, PPE, insurance, training), calculate optimal expense claims, and prepare Self Assessment returns that maximize your CIS refund. Average refund: £3,500-£8,000.
✓ LOYALS Handles This❌ Monthly Compliance Deadlines
The Challenge: Missing the 19th deadline for CIS300 returns triggers automatic £100 penalty, escalating to £300+ for repeat failures. Missing the 22nd payment deadline adds interest and tax-geared penalties. Many contractors struggle managing multiple subcontractors monthly.
How We Help: We handle 100% of monthly CIS compliance. We verify subcontractors, prepare CIS300 returns, submit by the 19th, and ensure deductions are paid by the 22nd. Our clients have zero CIS penalties - ever.
✓ LOYALS Handles This❌ Subcontractor Verification Failures
The Challenge: Failing to verify subcontractors before first payment, or applying wrong deduction rates (20% vs 30%), makes you liable for under-deducted tax for up to 6 years. HMRC's verification system is temperamental and errors are costly.
How We Help: We verify every subcontractor through HMRC's system before you make payment, maintain verification records for 3 years, and apply correct deduction rates. If HMRC challenges deductions, we defend with complete audit trail.
✓ LOYALS Handles This❌ Domestic Reverse Charge VAT
The Challenge: Since March 2021, most construction services between VAT-registered businesses fall under Domestic Reverse Charge - subcontractors charge 0% VAT and contractors self-account for VAT. 69% of construction firms still misunderstand this, risking penalties.
How We Help: We determine which services fall under reverse charge, ensure invoices show correct 0% VAT with proper notation, configure VAT returns to self-account correctly, and train your team on compliant invoicing. Zero reverse charge errors for our clients.
✓ LOYALS Handles This❌ Materials vs Labour Separation
The Challenge: CIS deductions apply only to labour costs, not materials. Contractors must separate materials on invoices and payment statements, but many don't. This creates over-deductions and complex corrections.
How We Help: We set up your invoicing to properly separate materials and labour, train you on documentation requirements, ensure CIS deductions apply only to labour, and defend your position if HMRC challenges your materials allocation.
✓ LOYALS Handles ThisComplete CIS Services for Contractors
If you pay subcontractors for construction work, CIS compliance is mandatory and penalties for errors are severe. We handle everything so you can focus on running your business.
🏗️ What We Do For You
- CIS Registration: Register you as a contractor with HMRC, set up PAYE for CIS, configure your Gateway account
- Subcontractor Verification: Verify every subcontractor before first payment, confirm correct deduction rate (20%, 30%, or gross), maintain 3-year verification records
- Monthly CIS300 Returns: Prepare and submit by 19th deadline every month, include all payments to subcontractors, calculate total deductions owed
- Payment & Deduction Statements: Issue statements to each subcontractor within 14 days of month-end, show gross payment, CIS deducted, net paid, materials breakdown
- Deduction Payments: Ensure CIS deductions paid to HMRC by 22nd, prevent interest and penalties, reconcile with PAYE if needed
- Domestic Reverse Charge Compliance: Identify which services fall under reverse charge, configure VAT treatment correctly, train your team on compliant invoicing
- HMRC Correspondence: Handle all CIS queries from HMRC, defend verification challenges, manage penalty appeals
- CIS Records Management: Maintain all records for 3 years as required, produce documentation for audits, organize subcontractor files
🎯 Why Contractors Choose Us
- Zero Penalties Guarantee: We've handled 500+ contractors' CIS for years with zero late filing penalties - ever
- Extended Hours: Available Mon-Fri 9am-6pm, Sat-Sun 10am-5pm when you need urgent verification or advice
- Same-Day Verification: We verify subcontractors same-day so you can pay them on schedule
- Proactive Reminders: We chase you for information before deadlines, never after
- Fixed Monthly Fee: £150-£250/month covers unlimited subcontractors and complete CIS compliance
- Construction Expertise: Over 80% of our clients are construction businesses - we speak your language
- Reverse Charge Specialists: We're one of few accounting firms who truly understand Domestic Reverse Charge
- Audit Protection: If HMRC investigates, we defend with complete documentation and professional representation
💡 Common Contractor Mistakes We Prevent
Late Registration: You must register before paying your first subcontractor. Late registration = penalties backdated to when you should have registered. Wrong Deduction Rates: Applying 20% when it should be 30% (or vice versa) makes you liable for under-deducted tax. Verification Failures: Not verifying before payment, or using outdated verification, triggers penalties. Materials Errors: Not separating materials means over-deducting CIS and underpaying subcontractors. Late Returns: Just one day late = automatic £100 penalty. Reverse Charge Confusion: Getting Domestic Reverse Charge wrong triggers VAT errors cascading through both businesses.
Complete CIS Services for Subcontractors
If you work for contractors and have CIS deducted from your payments, you're likely overpaying tax. We help you claim back every penny you're owed while maintaining compliance.
🔧 What We Do For You
- CIS Registration: Register you with HMRC for CIS, set up UTR and online account, apply for optimal deduction rate
- Gross Payment Status Applications: Assess your eligibility for gross payment (0% deductions), prepare complete application with supporting evidence, handle HMRC process (4-8 weeks)
- CIS Deduction Tracking: Compile all CIS deduction statements from multiple contractors, reconcile to HMRC records, identify missing deductions
- Expense Maximization: Identify every allowable construction expense (tools, materials purchased, fuel, vehicle costs, PPE, insurance, phone, training), calculate business vs personal proportions
- Self Assessment Returns: Prepare tax returns showing all CIS deductions, claim all allowable expenses, optimize tax position
- CIS Refund Claims: Calculate total refund due, submit return by 31 January, chase HMRC for payment (typically 4-6 weeks)
- Payment on Account Management: Reduce POA if circumstances change, prevent overpaying estimated tax, claim refunds on overpaid POA
- Growth to Limited Company: Advise when incorporating makes sense, handle complete incorporation, switch to optimal director pay strategy
💰 Why Subcontractors Choose Us
- Maximum Refunds: Average CIS refund we secure: £3,500-£8,000 annually (often double what subcontractors expect)
- Fast Processing: We submit returns early (Aug-Sept, not Jan rush), getting your refund in your account by March
- Expense Expertise: We know every construction expense HMRC allows - most accountants don't specialize in this
- Gross Status Success: 95% application success rate for eligible subcontractors - most accountants won't even attempt applications
- Affordable Pricing: £300 one-off for Self Assessment (under £50K turnover) or £150/month all-inclusive (over £50K turnover)
- Construction Focus: We work with electricians, plumbers, carpenters, bricklayers, plasterers, roofers, groundworkers daily
- Extended Hours: Weekend availability (Sat-Sun 10am-5pm) for tradespeople who work weekdays
- Growth Support: When you're ready to grow, we help you take on employees, incorporate, or scale to multiple teams
💡 Common Subcontractor Mistakes We Prevent
Not Registering: Working without CIS registration means 30% deductions instead of 20%. Missing Deductions: Losing CIS statements means you can't claim deductions back - we've recovered £15K+ in "lost" deductions for clients. Under-Claiming Expenses: Most subcontractors claim only obvious expenses (tools) and miss fuel, vehicle costs, phone, insurance, training - leaving thousands unclaimed. Paying POA Unnecessarily: Payment on Account assumes next year matches this year - if income drops, you overpay. Missing Gross Status Opportunity: If you qualify for gross payment but don't apply, you lose 20% cash flow unnecessarily. Wrong Tax Code: If you also have employment, wrong tax code means double-taxing one income stream.
💰 CIS Refund Maximization - How We Get Your Money Back
The 20% CIS deduction from every payment almost always exceeds your actual Income Tax and National Insurance liability. With proper expense tracking and tax planning, most subcontractors receive substantial refunds.
£30,000 Income
CIS deducted: £6,000
Actual tax due: £3,900
Refund: £2,100
£50,000 Income
CIS deducted: £10,000
Actual tax due: £5,500
Refund: £4,500
£70,000 Income
CIS deducted: £14,000
Actual tax due: £7,800
Refund: £6,200
These examples assume proper expense tracking. Without claiming all allowable expenses, your refund will be smaller. Our Construction expense specialists ensure you claim every legitimate deduction.
Domestic Reverse Charge VAT for Construction
Introduced March 2021, the Domestic Reverse Charge shifts VAT responsibility from subcontractor to contractor for most construction services. 69% of construction businesses still don't fully understand this - leading to costly errors.
What Is Domestic Reverse Charge?
For specified construction services between two VAT-registered businesses, the subcontractor charges 0% VAT on their invoice (instead of 20%) and notes "Domestic Reverse Charge applies." The contractor then self-accounts for both output VAT and input VAT on their VAT return. This prevents VAT fraud but creates complex invoicing requirements.
When Does It Apply?
Domestic Reverse Charge applies when ALL of the following are true: (1) Both parties are VAT registered, (2) The services are within CIS scope (construction operations defined in Schedule 3, Finance Act 2004), (3) The services are "specified services" - building, altering, repairing, extending, demolishing or dismantling buildings or structures, (4) End-user exemptions don't apply (residential conversions, do-it-yourself builders).
Services That Fall Under Reverse Charge
- Groundwork and foundations
- Bricklaying and blockwork
- Carpentry and joinery
- Roofing work
- Plastering and rendering
- Electrical installation (building)
- Plumbing installation (building)
- Decorating and painting
Services Outside Reverse Charge
- Work for non-VAT registered customers
- Residential conversions
- DIY housebuilders
- Materials-only supplies
- Professional services (architects, surveyors)
- Non-construction services
- Electrical/plumbing repairs (not installation)
- Manufacturing off-site components
Invoice Requirements
- Show 0% VAT (not exempt)
- Include "Domestic Reverse Charge" note
- Reference VAT Act 1994 Section 55A
- Show VAT registration numbers
- Separate materials if applicable
- Show CIS deduction separately
- Clear labour breakdown
- Maintain for 6 years
Common Domestic Reverse Charge Mistakes
Charging 20% VAT when reverse charge applies: Subcontractor charges standard VAT, creating VAT overpayment. Requires complex corrections on both VAT returns. Not applying reverse charge when it should: HMRC views this as VAT avoidance if done deliberately. Penalties up to 100% of VAT involved plus interest.
Wrong end-user determination: Assuming residential work is always exempt - it's not. New builds for sale aren't end-user work. Missing invoice notation: Not clearly stating "Domestic Reverse Charge applies" means contractors may pay wrong VAT. Applying to non-CIS services: Architects, consultants, designers are professional services, not construction - standard VAT applies.
🎯 How LOYALS Ensures Reverse Charge Compliance
We determine exactly which of your services fall under Domestic Reverse Charge, configure your invoicing software to apply 0% VAT correctly with required notation, train your team on when to use reverse charge vs standard VAT, set up your VAT return to self-account correctly (Box 1 output VAT = Box 4 input VAT for reverse charge items), reconcile CIS deductions with VAT reporting, and defend your position if HMRC challenges any reverse charge treatment. Our construction clients have zero reverse charge errors or penalties.
Growing Your Construction Business Beyond Compliance
CIS compliance is the foundation, but growing a construction business requires strategic planning around employees, project finance, and cash flow. We've helped 500+ construction businesses scale profitably.
Scaling: Employees vs Subcontractors
The decision to hire employees versus using subcontractors depends on control needs, ongoing workload, training requirements, and cost structures. Employees give you more control - you dictate hours, methods, and quality. But they cost more: salary plus employer NI (15%), employer pension contributions (3%+ mandatory), holiday pay (5.6 weeks), sick pay, and employment law obligations. Subcontractors offer flexibility - you pay only for work done with no fixed costs. But you have less control, they may work for competitors, and quality can vary.
Most successful construction businesses use a hybrid model: core team of employees for consistent quality and customer relationships, plus subcontractors for peak demand, specialist skills, or project-specific needs. We help you model the costs, determine optimal team structure, handle PAYE setup for employees, and maintain CIS compliance for subcontractors.
Financial Planning for Construction Projects
Construction projects have unique financial challenges: upfront material costs before customer payment, subcontractor payments on completion while waiting for main contractor payment, retention (5-10% held back for 6-12 months), and seasonal cash flow fluctuations. Poor project finance planning kills more construction businesses than lack of work.
Project costing accuracy is critical - underestimate costs by 10% and your profit disappears. We help you create detailed project budgets covering all materials, labour (including your time valued properly), subcontractor costs, waste and contingency, equipment hire, travel and logistics, and overheads allocation. Cash flow forecasting shows when money goes out (materials, subcontractors) versus when it comes in (customer payments, retention releases). We help you plan working capital needs and identify danger periods.
Managing Construction Cash Flow
Cash flow management is the difference between construction businesses that thrive and those that fail despite being profitable on paper. Key strategies we implement:
Payment terms optimization: Negotiate better terms with suppliers (extending from 30 to 45 days frees up £X working capital), negotiate deposits from customers (20-30% upfront covers initial materials), structure stage payments to match project milestones, and chase retention releases aggressively when due. Invoice management: Issue invoices immediately on completion or milestone achievement (our Premium Accounting clients have us issue their invoices professionally), chase payment at 7, 14, and 21 days, and use our debt recovery service for persistent non-payers (we've recovered £500K+ for clients).
Supplier relationships: Build strong relationships with 2-3 trade suppliers for volume discounts, take advantage of early payment discounts (2% for paying in 10 days = 36% annual return), and maintain supplier credit lines for large projects. Working capital facilities: Invoice financing advances you 80-90% of invoice value immediately (costs 1-3% but prevents cash flow gaps), business overdrafts provide buffer for seasonal fluctuations, and equipment financing spreads vehicle/machinery costs rather than upfront purchase.
💡 LOYALS' Construction Business Growth Programme
Our Business Growth Programme (£2,000/month) is specifically designed for construction businesses scaling beyond £250K turnover. You get dedicated business mentor with construction industry experience, detailed project costing and pricing models, cash flow forecasting and working capital planning, employee vs subcontractor optimization, tendering and contract review, supplier negotiation support, growth finance applications (invoice financing, overdrafts, equipment finance), and strategic planning for £500K to £1M+ turnover. Five of our construction clients have scaled from solo subcontractor to teams of 10+ employees using this programme.
CIS-Focused Accounting Packages for Construction Businesses
Every package includes full CIS compliance as standard. We've tailored our services specifically for construction contractors and subcontractors across London.
Premium Accounting
Per month
✓ CIS Services Included:
- • Monthly CIS300 returns (19th deadline)
- • Subcontractor verification (unlimited)
- • Payment & deduction statements
- • CIS refund maximization
- • Domestic Reverse Charge VAT
- • Gross payment status applications
✓ Plus Full Accounting:
- • Annual accounts & tax returns
- • Professional invoice management
- • Debt recovery support
- • Unlimited email/phone support
Business Mentor
Per month
✓ Everything in Premium, Plus:
- • Dedicated business mentor
- • Project costing & pricing advice
- • Professional quote preparation
- • Cash flow management support
- • On-demand business advice
- • Employee vs subcontractor planning
- • Tendering support
- • Access to 500+ client network
Business Growth
Per month
✓ Everything in Business Mentor, Plus:
- • Complete business growth team
- • Marketing & lead generation
- • Legal advice & contract review
- • Office & admin support
- • Sales coaching & training
- • Strategic growth planning
- • Funding applications support
- • Dedicated growth manager
All packages include CIS specialist expertise, extended hours (Mon-Fri 9am-6pm, Sat-Sun 10am-5pm), and zero-penalty guarantee. Call 07450 258975 to discuss which package suits your construction business.
CIS Questions Answered by London's Construction Accountants
CIS Experts Who Speak Your Language
We're not generalist accountants trying to serve every industry. Over 80% of our clients are construction businesses. CIS compliance, refund maximization, and construction business growth is what we do every single day.
✅ Zero CIS penalties - ever
✅ Average CIS refunds: £3,500-£8,000
✅ 95% gross payment status success rate
✅ Extended hours including weekends
Or call 07450 258975
Mon-Fri 9am-6pm · Sat-Sun 10am-5pm