Accountants for construction and CIS

Construction has a tax scheme all of its own, and it rarely works in your favour by accident. Money is stopped from your invoices before you see it, the VAT rules were turned upside down a few years ago, and every month there’s a return to file. Many subcontractors are quietly owed a healthy refund they never claim, and many contractors are one late return away from a penalty. Getting this right is worth real money, and it is exactly the sort of thing a generalist accountant treats as an afterthought. We treat it as the main event.

Reviewed July 2026. CIS and construction VAT rules are detailed and depend on your circumstances. Always check GOV.UK or speak to us before acting.

What’s different about construction accounting

On top of the usual tax, construction has the Construction Industry Scheme (CIS). Contractors have to deduct tax from what they pay subcontractors and send it to HMRC. Subcontractors have that tax stopped at source, which often adds up to more than they actually owe. Layer on the VAT domestic reverse charge, the split between labour and materials, and lumpy project-based cash flow, and you have a sector where the details genuinely decide how much you keep.

CIS: how the deductions work

Under CIS, a contractor deducts tax from the labour part of a subcontractor’s invoice and pays it to HMRC on their behalf. The standard rate is 20% for registered subcontractors and 30% for those who are not registered. Crucially, the deduction applies to labour only: genuine materials and certain other costs are excluded, so getting your invoices split correctly matters. For a subcontractor, that deducted tax is not lost. It counts towards your tax bill, and frequently exceeds it.

Subcontractors: getting your money back

This is where we save people the most. Because CIS is deducted from your gross labour, before your expenses and allowances, most subcontractors have had far more tax taken than they owe by the year end. If you are a sole trader, we reclaim the difference through your Self Assessment, often as a welcome refund. If you work through a company, we set the CIS suffered against what the company owes. Either way, we make sure the money that was stopped from you comes back, promptly and in full.

Contractors: staying compliant without the headache

If you pay subcontractors, CIS is an ongoing obligation, not a one-off. You need to verify each subcontractor with HMRC to get the right deduction rate, deduct correctly, give them deduction statements, and file a monthly CIS return (the CIS300) by the 19th of each month, even in a month with nothing to report. Miss a return and penalties start quickly. We run the whole monthly cycle for you so it is simply handled.

Gross payment status

If you qualify, gross payment status lets you be paid in full with no CIS deducted, and you settle your tax in the normal way instead. It is a real cash-flow advantage for established subcontractors who meet the turnover and compliance tests. HMRC is tightening the rules around it, including the power to withdraw it quickly where compliance slips, so keeping your affairs clean matters more than ever. We help you apply for it and keep it.

The VAT domestic reverse charge

Since 2021, most VAT-registered construction work between businesses uses the domestic reverse charge. In plain terms: if you are a subcontractor invoicing a VAT-registered, CIS-registered contractor who is not the end user, you do not charge them VAT. Instead, they account for it on their own return. Your invoice must say the reverse charge applies. It is tax-neutral overall, but it changed cash flow for a lot of subcontractors who used to hold that VAT for a while, and it catches people out on both sides. We make sure your invoices and returns handle it correctly.

Making Tax Digital for subcontractors

If you are a self-employed subcontractor (a sole trader) with income over £50,000, Making Tax Digital for Income Tax applies to you from April 2026, which means keeping digital records and sending HMRC quarterly updates, with lower thresholds following. Monthly CIS returns remain a separate contractor obligation. Our MTD for Income Tax guide explains what changes for you.

What we handle for you

On one fixed monthly fee: CIS registration, subcontractor verification and monthly CIS300 returns, deduction statements, reclaiming CIS suffered through Self Assessment or against Corporation Tax, gross payment status applications, the VAT reverse charge, your annual accounts and tax, and MTD. You get a dedicated accountant, our 3-hour email promise, and plain-English answers, whether you are a sole-trader subbie or running a growing firm.

Why construction businesses choose Xpert

Most people in construction come to us either owed a CIS refund they had given up on, or fed up with the monthly-return grind and the reverse-charge confusion. We are proactive and CIS-fluent: fixed monthly fees, a real person who knows how the scheme works, no long tie-ins, and we handle the switch from your current accountant for you.

In construction and want your CIS, VAT and refunds sorted properly? Take our 2-minute quiz or book a free consultation, and we’ll get you back what you’re owed and keep you compliant.