Construction Industry Accounting
UK construction companies operate under the Construction Industry Scheme (CIS) with mandatory HMRC registration, monthly CIS returns, and tax deduction obligations on subcontractor payments. Additionally, the domestic reverse charge VAT mechanism for construction services adds complexity to VAT reporting. Project-based work requires careful WIP accounting, and the sector's high use of subcontractors raises IR35 and employment status considerations.
Our construction accounting services cover CIS registration and compliance, monthly CIS return filing, domestic reverse charge VAT processing, job costing and WIP tracking, progress billing and retention management, subcontractor payment processing, and Corporation Tax planning including capital allowances on plant and equipment.
What's Included
Comprehensive services tailored to your industry needs
Industry-Specific UK Expertise
Key UK Challenges
Complexities you face
- Verifying subcontractors with HMRC and applying correct CIS deduction rates (0%, 20%, or 30%)
- Filing monthly CIS returns to HMRC by the 19th of each month without errors
- Implementing the domestic reverse charge VAT correctly — the customer accounts for VAT instead of the supplier
- Managing retention accounting — typically 5% held back until practical completion or defects liability period
- Tracking WIP and revenue recognition on long-term contracts under FRS 102 Section 23
- Determining employment status of workers — self-employed subcontractor vs disguised employee
Tax Considerations
HMRC rules & reliefs
- CIS deductions — contractors must deduct 20% (registered) or 30% (unregistered) from subcontractor payments
- Domestic reverse charge VAT — applies to most construction services between VAT-registered businesses in the CIS
- Capital allowances — full expensing on new plant and machinery; AIA on second-hand equipment
- Corporation Tax — 25% on profits; marginal relief for small profits between £50,000 and £250,000
- IR35 — medium and large construction companies responsible for determining worker status
- Landfill Tax — applies to disposal of construction waste at landfill sites
How We Help
Our tailored solutions
- CIS subcontractor verification and monthly return filing with HMRC
- Domestic reverse charge VAT implementation and training for your accounts team
- Job costing systems with project-level profitability reporting and WIP tracking
- Retention management and aged retention analysis
- Capital allowance claims on plant, machinery, and commercial buildings
- Corporation Tax planning including group structures and loss relief for construction groups
Ready to Simplify Your Construction Industry Finances?
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