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Construction

Accounting for construction — contractors, subcontractors and trades — where the industry runs its own tax scheme, its own VAT regime, and a project accounting discipline that decides who survives the thin-margin years.

Speak to a Specialist Call 020 8567 3451

Construction is the most tax-bespoke sector in Britain: CIS deductions flowing through every contractor-subcontractor payment with monthly returns and penalties on autopilot; the domestic reverse charge upending how VAT moves through the supply chain; employment status policed harder here than anywhere; and underneath it all, project economics where retentions, applications and variations mean the contract sum and the cash received part company for years.

Acumon has the construction stack in-house: a CIS team running verification and returns inside our payroll practice, VAT specialists fluent in the reverse charge's edge cases, and project accounting that tells you which jobs made money — not just whether the year did.

CIS, Run Properly

The Construction Industry Scheme is unforgiving plumbing: contractors must verify subcontractors, deduct at 0%, 20% or 30%, file monthly returns with automatic penalties, and provide statements; subcontractors bleed 20% at source unless gross payment status rescues their cashflow — a status with tests to win and compliance to keep. We run the whole scheme both ways: verification, deductions and returns for contractors through our CIS payroll team, and for subcontractors, deduction reconciliation, refunds chased properly (limited company offsets against PAYE, sole trader repayments at year-end), and gross status applications built to pass.

Reverse Charge VAT and the Cashflow Hit

The domestic reverse charge moved VAT accounting up the chain for most CIS-scope supplies between VAT-registered construction businesses: suppliers no longer charge VAT, customers self-account — and subcontractors lost the VAT cashflow they had quietly lived on, while everyone acquired invoice-wording, end-user certification and mixed-supply edge cases to get wrong. We configure the treatments correctly in your bookkeeping, fix supplier and customer disputes over who charges what, and move affected subcontractors to monthly VAT returns where repayment positions justify it.

Project Accounting: Which Jobs Made Money

Construction profit is a project-level fact averaged into meaninglessness by year-end accounts: applications and certifications versus costs to date, variations priced and agreed or silently absorbed, retentions tracked to their release dates rather than forgotten, WIP valued honestly, and loss-making jobs recognised when known — not discovered at final account. We build job costing into your systems and produce project profitability reporting that names the margin-eaters, which is the single most valuable number a builder's accountant can produce.

Status, Payroll and the Wider Stack

The line between employee and subcontractor is enforced harder in construction than anywhere, with status failures generating PAYE liabilities plus CIS unwinding at once — so we review engagement patterns honestly before HMRC does. Around it sits the sector's routine load: payroll with sites and travel rules, retentions and contract disputes needing numbers, plant purchases through capital allowances (full expensing while it lasts), and eventually the succession or sale conversation every family firm reaches. All of it in one firm, with the CIS thread understood throughout.

What You Get With Acumon

  • CIS verification, deductions and monthly returns run in-house
  • Gross payment status applications built to pass — and kept
  • Subcontractor CIS refunds and PAYE offsets chased properly
  • Domestic reverse charge configured correctly, disputes resolved
  • Monthly VAT returns where repayment positions justify them
  • Job costing and project profitability reporting that names names
  • Retentions tracked to release dates, not written off by forgetting
  • Employment status reviewed honestly before HMRC reviews it for you

Why Acumon for Construction?

  • CIS registration, verification and returns run by the CIPP-qualified payroll team
  • VAT specialists in-house, several previously with HMRC
  • Accountants for construction businesses from sole-trade subcontractors to main contractors
  • All 90 of the firm's professionals are based in the UK

Get a Fixed-Fee Quote

Tell us what you need and we'll come back within one business day with a clear scope and a fixed price — no hourly-rate surprises. Call 020 8567 3451 or use the form and we'll be in touch.

Common Questions

Frequently Asked Questions

Should I apply for gross payment status?
If you can pass and keep it, almost always: gross status stops the 20% haemorrhage at source and transforms subcontractor cashflow, which is why main contractors also read it as a mark of substance. The tests are business, turnover (net construction turnover thresholds), and — the one that catches people — compliance: filings and payments kept current, reviewed by HMRC annually thereafter, with status lost for lapses precisely when losing it hurts most. We assess against the tests first, repair any compliance history, then apply once the application will succeed.
My subcontractor says I shouldn't charge VAT — or should. Who's right?
The reverse charge decides it, and the tests are checkable: it applies to VAT-registered, CIS-scope construction services between businesses in the chain, unless the customer is an end user or intermediary who has certified as such in writing. Then the supplier invoices without VAT, noting the reverse charge, and the customer self-accounts. Common failure points: end-user status never certified, mixed invoices where reverse-charge elements pull in the whole supply, and merchants caught on materials-with-labour. We settle the specific dispute and template your invoicing so it stops recurring.
Why does my company owe tax when the jobs felt profitable?
Construction's classic gap: profit is recognised as work is done, but cash lags it by months — retentions held for years, applications certified late, variations disputed — while costs went out on time, and CIS deductions may sit unreclaimed against the liability. Frequently the real answer is mixed: some jobs earned, one quietly lost, and without job costing the winners hid the loser. Project-level accounts plus a retention ledger plus CIS reconciliation usually reconstructs exactly where the money went — and changes how the next contracts are priced and papered.
Can you sort out CIS penalties and a messy compliance history?
Yes — CIS penalty stacks are common and more repairable than they look: late-return penalties accumulate automatically but can be appealed with reasonable excuse, capped in some catch-up situations, and reduced where returns were nil; unverified subcontractor deductions can be corrected; and a repaired compliance record reopens the road to gross status. We reconstruct the position, file what is missing, appeal what is appealable and set up the monthly discipline so it never rebuilds. The worst strategy is ignoring it — CIS penalties compound by month, mechanically.
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