Industry specialists
Accountants for Construction & CIS
At a glance
- CIS deduction rates: 20% registered, 30% unregistered, 0% with gross payment status
- Contractors must file CIS returns by the 19th of every month — £100 penalty per late return, rising over time
- Subcontractor refunds: limited companies reclaim through payroll (EPS) in-year; sole traders through self assessment — average refunds commonly £1,500–£3,000
- Domestic reverse charge: since March 2021 most construction supplies between VAT-registered businesses are invoiced without VAT — the customer accounts for it
- Gross payment status needs a compliance test plus turnover of £30k (sole trader) / £30k per director or £100k total (companies)
For subcontractors: getting your deductions back
If contractors deduct 20% from your invoices all year, you've usually overpaid — deductions ignore your expenses, materials, and personal allowance. Sole traders reclaim through self assessment after the year ends; limited companies offset deductions against PAYE monthly and reclaim the balance after the final EPS. A CIS accountant's fee is often covered several times over by one properly-prepared refund claim, and speed matters: badly-evidenced claims sit in HMRC queues for months.
For contractors: the monthly compliance treadmill
Engaging subcontractors means verifying each one with HMRC (which sets their deduction rate), deducting correctly on labour but not materials, filing the CIS300 by the 19th monthly, and issuing deduction statements. Penalties stack per return, per month. Most construction accountants run this alongside payroll for a fixed monthly fee — and will fight status battles when HMRC argues a subcontractor is really an employee.
Reverse charge VAT still catches firms out
Since 2021, a VAT-registered subcontractor invoicing another VAT-registered construction business usually charges no VAT — the customer self-accounts. Get it wrong in either direction and someone owes HMRC. It also drains subcontractor cash flow (no more VAT collected to hold), which is why many switched to monthly VAT returns for faster repayments — exactly the kind of call a construction specialist makes early.
Gross payment status: worth chasing
Gross status means contractors pay you in full — transforming cash flow. HMRC tests filing history, bank details, and turnover (£30,000 for sole traders; £30,000 per director or £100,000 overall for companies), and reviews compliance annually — one run of late filings can lose it. An accountant preps the application and, more importantly, keeps the compliance record clean enough to retain it.
Frequently asked questions
How do I register for CIS?
Subcontractors register online with HMRC (you'll need your UTR) — unregistered subcontractors suffer 30% instead of 20%. Contractors must register before paying their first subcontractor and verify each one with HMRC.
Do CIS deductions apply to materials?
No — deductions apply to the labour element only. Invoices should split labour and materials clearly; if they don't, contractors must deduct from the lot, which is why specialist bookkeeping pays for itself.
When will I get my CIS refund?
Sole traders: after filing self assessment from 6 April — well-prepared claims are typically repaid in 2–8 weeks. Limited companies: offset in-year against PAYE, with any balance reclaimed after the tax year via the final EPS.
Information only — not tax, accountancy, or financial advice. Rules and thresholds change; confirm current positions with GOV.UK or a qualified accountant. Last reviewed: 2026-07-09.