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Construction Industry Scheme Tax Services
Construction Industry Scheme Accountants
Our experienced tax accountants provide expert support with the Construction Industry Scheme (CIS), ensuring contractors and subcontractors stay compliant. We simplify CIS tax, reduce stress, and help you achieve favourable outcomes with confidence.
Get Help for Construction Industry Scheme
CIS Tax Services for Contractors and Subcontractors
CIS tax services for contractors and subcontractors are designed to simplify compliance with the Construction Industry Scheme and HMRC rules. Our tax accountants provide expert guidance on registering, filing monthly CIS returns, and managing deductions accurately. This approach ensures compliance in a way that is efficient and cost-effective, reducing the risk of penalties while saving valuable time and resources. CIS support is accessible to contractors, subcontractors, and construction firms of all sizes.
Handling CIS Disputes and Investigations
Handling CIS disputes and investigations requires expert help to resolve issues quickly and effectively. Our tax specialists assist contractors and subcontractors with HMRC inquiries, verify compliance, and resolve disputes regarding CIS deductions. This approach ensures disputes are settled cost-effectively, helping to prevent penalties and protect cash flow. Our CIS dispute resolution services are accessible to all construction firms, providing clarity, confidence, and peace of mind.
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What is the Construction Industry Scheme (CIS) and who does it apply to?
The Construction Industry Scheme (CIS) is a set of tax rules introduced by HMRC for the construction sector. It applies to both contractors and subcontractors.
- Contractors are businesses that pay subcontractors to do construction work.
- Subcontractors are individuals or companies hired to carry out that work.
Under CIS, contractors are required to deduct money from a subcontractor’s payments and pass it on to HMRC. These deductions count as advance payments toward the subcontractor’s tax and National Insurance.
For example, if a contractor owes a subcontractor £1,000 for work, they may have to deduct 20% (£200) under CIS and pay it directly to HMRC, leaving £800 for the subcontractor. This system ensures tax is collected throughout the year rather than at the end. But for businesses, it also creates a complex admin burden.
At Tax Accountant, we provide full CIS tax services. We register contractors and subcontractors, handle monthly CIS returns, ensure deductions are calculated accurately, and manage refunds for overpaid CIS.
The scheme can be confusing because the rules change depending on whether you’re registered with HMRC or not. Registered subcontractors typically have a 20% deduction, while unregistered ones face a 30% deduction. Contractors who fail to deduct correctly risk penalties.
How can Tax Accountant help contractors with CIS compliance?
If you’re a contractor, CIS compliance can feel like a minefield. Every month, you must verify your subcontractors with HMRC, calculate deductions correctly, file CIS returns, and pay HMRC on time. Missing a step can lead to fines.
At Tax Accountant, we provide complete support for contractors, including:
- Registering as a CIS contractor with HMRC.
- Verifying subcontractors to ensure you apply the right deduction rate.
- Preparing and submitting monthly CIS returns on your behalf.
- Managing deductions so payments are accurate and compliant.
- Avoiding penalties by staying on top of HMRC deadlines.
For example, if you don’t file a CIS return by the 19th of each month, HMRC can fine you £100 instantly, with further penalties piling up. Many contractors lose money simply because they didn’t know or forgot.
We also integrate CIS with payroll, ensuring your records are accurate, deductions are tracked, and everything aligns with HMRC expectations.
Contractors are often busy running sites, managing staff, and securing new projects. Handling CIS admin on top of that can be overwhelming. That’s where we step in—freeing you to focus on your business.
How do subcontractors benefit from CIS tax services?
Subcontractors often feel the brunt of CIS rules because 20–30% of their pay is deducted at source. While this helps HMRC collect tax, it can leave subcontractors with a cash shortfall. In many cases, subcontractors overpay and are entitled to refunds. That’s where we come in.
At Tax Accountant, we help subcontractors by:
- Registering with HMRC so they only face 20% deductions instead of 30%.
- Claiming refunds for CIS tax overpayments.
- Filing self-assessment tax returns that include CIS deductions.
- Advising on expenses (like tools, travel, and protective gear) that reduce taxable income.
- Explaining VAT obligations if turnover exceeds the VAT threshold.
For example, a subcontractor earning £40,000 may have £8,000 deducted under CIS. However, after claiming business expenses, their actual tax liability might be lower—meaning HMRC owes them a refund.
Without expert help, many subcontractors miss out on refunds because they don’t file correctly. We ensure they reclaim every penny.
What are CIS tax deductions, and how are they calculated?
CIS deductions are amounts that contractors deduct from subcontractors’ pay and send to HMRC. They are meant to cover Income Tax and National Insurance in advance.
The rate depends on the subcontractor’s status:
- 20% for registered subcontractors.
- 30% for unregistered subcontractors.
- 0% (gross payment status) for those approved by HMRC, meaning no deductions are taken.
For example, if a registered subcontractor invoices £2,000, the contractor deducts £400 (20%) and pays the relevant tax to HMRC. The subcontractor receives £1,600, and the £400 counts toward their tax bill.
At Tax Accountant, we ensure that deductions are accurate, properly reported, and accurately reflected in CIS returns. Incorrect deductions can cause disputes with HMRC or subcontractors. We also check whether you qualify for gross payment status. This allows subcontractors to be paid in full without any deductions, thereby improving their cash flow. HMRC approval depends on meeting strict compliance criteria—which we can help you achieve.
How do I register for the Construction Industry Scheme?
Both contractors and subcontractors need to register with HMRC for CIS. The process can be confusing, but it’s essential to avoid penalties.
- Contractors must register before taking on subcontractors. They need to set up PAYE, verify subcontractors, and file monthly CIS returns.
- Subcontractors should register to reduce the deduction from 30% to 20%.
At Tax Accountant, we handle CIS registration from start to finish. We ensure that contractors are correctly set up and that subcontractors are registered promptly. For subcontractors, we also explore applying for gross payment status, which means no deductions at all.
For example, a subcontractor earning £50,000 could lose between £15,000 and 30% of their earnings if they are not registered. By registering, that drops to £10,000 at 20%. With expenses factored in, the actual tax liability might be even lower—meaning refunds are due.
How do CIS tax returns work, and when are they due?
Contractors are required to file a CIS return with HMRC every month, detailing subcontractor payments and deductions. Returns are due by the 19th of each month following the payment. For example, payments made in June must be reported by 19 July. Missing deadlines results in automatic penalties:
- £100 immediately if late.
- Additional fines if overdue longer.
At Tax Accountant, we prepare and submit CIS returns on your behalf. We ensure all subcontractor verifications and deductions are correct before filing. This prevents HMRC disputes and penalties. We also issue CIS deduction statements to subcontractors, allowing them to claim deductions on their own tax returns.
What happens if I make mistakes or face HMRC investigations?
CIS mistakes are common—incorrect deductions, late filings, or missed registrations. Unfortunately, HMRC takes them seriously and often issues penalties. If you’re facing an HMRC investigation or dispute, don’t panic. At Tax Accountant, we specialise in CIS dispute resolution.
We can:
- Review your CIS records for errors.
- Communicate with HMRC on your behalf.
- Negotiate penalties or settlements.
- Correct past returns to bring you back into compliance.
For example, a contractor who missed several monthly returns was facing heavy fines. We collaborated with HMRC to mitigate penalties and establish a compliance system to prevent future issues.
Can subcontractors claim CIS refunds?
Many subcontractors overpay under CIS and are entitled to refunds. This occurs because CIS deductions are made at a rate of 20%, even if the actual tax liability is lower after deducting expenses. At Tax Accountant, we help subcontractors claim refunds by:
- Filing accurate self-assessment returns.
- Including CIS deductions and business expenses.
- Ensuring refunds are processed quickly.
For example, a subcontractor earning £35,000 with £5,000 in allowable expenses may have £7,000 deducted under CIS. After calculating expenses, their real liability may be only £4,500—so HMRC owes them £2,500 back.
How does CIS interact with VAT and Income Tax?
CIS interacts with other taxes, making planning essential.
- Income Tax: CIS deductions are treated as advance payments toward subcontractors’ tax bills. The final liability is calculated through self-assessment.
- VAT: Subcontractors must charge VAT on invoices (if VAT registered), but CIS deductions are applied only to the labour element—VAT is excluded.
This can be unclear. For example, if a subcontractor invoices £1,000 plus £200 VAT, CIS is calculated only on the £1,000, not the £1,200. At Tax Accountant, we ensure that CIS, VAT, and Income Tax are aligned correctly. This prevents overpayments and ensures compliance.