What is included
- Monthly CIS returns filed on time
- Subcontractor verification with HMRC
- CIS refunds claimed for subcontractors
- Gross payment status applications
- Domestic reverse charge VAT applied correctly
- Deduction statements issued every month
Our services · Watford, Bushey & North West London
Construction Industry Scheme returns, verification and refunds handled properly, for contractors and subcontractors.
Contractors must deduct 20% from payments to subcontractors registered under CIS, or 30% from those who are not registered, and file a CIS return by the 19th of each month. Subcontractors with gross payment status receive payments with no deduction at all. Most subcontractors are due a refund at year end because the deduction ignores expenses and the personal allowance.
Construction has its own tax rules and they bite. Contractors must verify subcontractors, deduct 20% (or 30% if unverified), file monthly CIS returns and issue statements. Subcontractors watch a fifth of their income disappear before it arrives, and many end up owed a refund they never claim.
We work with contractors and subcontractors across Watford, Harrow and North West London. Monthly returns filed on time, subcontractors verified before you pay them, deduction statements issued, gross payment status applications where you qualify, and refunds reclaimed at year end. We also apply the domestic reverse charge correctly on VAT, which is where a lot of construction invoicing quietly goes wrong.
| Standard CIS deduction, registered | 20% |
| Unregistered subcontractor | 30% |
| Gross payment status | 0% |
| Monthly CIS return deadline | 19th of the month |
| Payment to HMRC deadline | 22nd if paying electronically |
| Late return penalty, 1 day | £100 |
| 2 months late | £200 |
| 6 months late | £300 or 5% of deductions, whichever is higher |
| 12 months late | £300 or 5%, potentially far more |
| Deduction statements | Must be issued to subcontractors within 14 days of the tax month end |
| Gross payment status turnover test | £30,000 per director or partner, or £100,000 for the business |
Construction is one of the few sectors where two separate regimes bite at once. CIS governs income tax deductions on labour, and the VAT domestic reverse charge governs how VAT is invoiced between businesses in the supply chain. They are independent of each other and both have to be right.
A subcontractor can easily find 20% withheld under CIS while also invoicing VAT incorrectly, which produces a cash flow problem and an HMRC correction at the same time. We handle both together: monthly returns filed, subcontractors verified before payment, statements issued, and invoicing set up so the reverse charge is applied correctly from the start.
20% for subcontractors registered with HMRC under CIS, 30% for those who are not registered, and nothing for those holding gross payment status. The deduction applies to the labour element only, not to materials, VAT or plant hire charged separately.
Very likely if you are a subcontractor. The 20% deducted takes no account of your business expenses, your personal allowance or your actual tax position, so most subcontractors overpay across the year. The overpayment is reclaimed through your Self Assessment return.
Monthly, by the 19th of each month, covering the tax month ending on the 5th. Payment to HMRC is due by the 22nd if paying electronically. A return is required even in months where you paid no subcontractors, unless you have told HMRC you are inactive.
Gross payment status means you are paid in full with no CIS deduction, which transforms cash flow. You must pass HMRC tests on turnover, compliance history and business records. The turnover test is broadly £30,000 per director or partner, or £100,000 for the business as a whole, excluding materials.
£100 if the return is one day late, £200 at two months, and £300 or 5% of the deductions at six months, whichever is greater, with a further charge at twelve months. Penalties accumulate per return, so several missed months become expensive quickly.
For VAT registered businesses supplying construction services to other VAT registered businesses that are not end users, the customer accounts for the VAT instead of the supplier. Invoices must state that the reverse charge applies. Getting this wrong is one of the most common errors we see in construction bookkeeping.
We provide cis for construction across Watford, Bushey, Harrow and North West London. Related services: Self Assessment Tax Returns · Bookkeeping and Making Tax Digital · VAT Returns and Registration · Payroll and PAYE · Corporation Tax · Company Accounts.
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