Back to Home
🔨

Construction & Trades Accountants

Construction industry accounting including CIS compliance, project costing, subcontractor payments, and reverse charge VAT.

AA
Written by Asrah Abbas, ACA / ACCA — Principal at Westfin Accountants Ltd
Chartered accountant with 12+ years of UK practice experience. Member of the Institute of Chartered Accountants in England and Wales (ICAEW) and the Association of Chartered Certified Accountants (ACCA).
Last updated:

In plain English

Construction has its own tax regime: CIS deductions, VAT domestic reverse charge, IR35 for subcontractors, and the upcoming Building Safety Levy. Westfin handles monthly CIS returns, gross payment status applications, and subcontractor employment-status reviews.

Sector-specific tax matters

The reliefs, schemes and risks that consistently apply in this sector — with HMRC source links so you can verify everything we say.

CIS — Construction Industry Scheme

Contractors deduct 20% (registered) or 30% (unregistered) from subcontractor payments and pay it to HMRC. Monthly CIS300 return + monthly payment.

Reference (gov.uk)
VAT Domestic Reverse Charge

Since March 2021, B2B construction services within CIS reverse the VAT — the customer accounts for it. Misapplied DRC is the #1 construction VAT error.

Reference (gov.uk)
Gross Payment Status

GPS removes the 20% CIS deduction — saves cash flow. Compliance test, turnover test (£30k+/yr per director or £100k+ company), business test.

Reference (gov.uk)

Common Construction & Trades Accounting Challenges

CIS deductions and compliance

Reverse charge VAT

Subcontractor vs employee status

Project costing and WIP

Retentions and stage payments

Construction Industry Scheme returns

Our Construction & Trades Solutions

Automated CIS deduction tracking

Reverse charge VAT compliance

Project-based profit reporting

Subcontractor verification

Retentions accounting

Monthly CIS return filing

Specialized Services for Construction & Trades

CIS compliance and monthly returns

Subcontractor payment and verification

Reverse charge VAT on construction services

Project costing and profitability

Work-in-progress valuations

Retention accounting

Construction & Trades FAQs

What is Construction Industry Scheme (CIS)?

CIS requires contractors to deduct 20% or 30% tax from subcontractor payments and pay it to HMRC. We handle verification, deductions, monthly returns, and year-end reconciliation.

How does reverse charge VAT work in construction?

From 2021, domestic reverse charge applies to most construction services where both parties are VAT registered. The recipient accounts for VAT, not the supplier. We ensure full compliance.

Should my workers be employees or subcontractors?

Employment status depends on control, substitution, and financial risk. Incorrectly classifying employees as subcontractors triggers HMRC penalties and back-taxes. We assess each case properly.

Ready to Get Started?

Speak to our Construction & Trades accounting specialists today