CIS Accountants

Vtrahe has looked after CIS clients in Birmingham for years, on both sides of the scheme. Sole traders on the tools, small building firms with a handful of subcontractors, and limited company subcontractors who need their deductions back through payroll rather than through a tax return. We work in English or Russian and fees are agreed before we start.

Our CIS Services Include

• Contractor and subcontractor registration with HMRC.
• Online verification of new subcontractors.
• Monthly CIS300 returns, including nil returns.
• Payment and deduction statements for your subcontractors.
• CIS refunds for sole traders through Self Assessment.
• CIS offset for limited companies through the monthly EPS.
• Gross payment status applications.
• VAT reverse charge set up on your invoicing.

CIS Deductions Made Simple

Contractors hold back part of each payment to a subcontractor and send it to HMRC. The subcontractor gets credit for it when their own tax is worked out. The deduction comes off labour only, never materials or VAT.

• 20% for a registered subcontractor.
• 30% for a subcontractor who has not registered.
• 0% for a subcontractor with gross payment status.

Example: a registered bricklayer is paid £4,000 in the month, £600 of it materials. The deduction is 20% of £3,400 = £680. He receives £3,320 and a statement for the £680.

Guidance On CIS Registration

Register as a contractor if you pay subcontractors for construction work, or if your business spends more than £3 million on construction in any rolling 12 months, even if construction is not your trade. Register before the first payment goes out.

Register as a subcontractor before your first job, otherwise contractors deduct 30% instead of 20%. You need a UTR first.

Do both if you are paid for construction work and also pay others for it.

Monthly Returns And Deadlines

• The tax month runs from the 6th to the 5th.
• The CIS300 return is due by the 19th of the following month.
• Deductions are paid to HMRC by the 22nd if paid electronically.
• A month with no payments still needs a nil return, unless HMRC was told in advance.
• Deduction statements go to subcontractors within 14 days of the tax month end.

Late return penalties, per return: £100 at 1 day, a further £200 at 2 months, a further £300 or 5% of the deductions at 6 months, and again at 12 months.

Claiming Your Deductions Back

Sole traders: CIS ignores your personal allowance and your expenses, so most people on 20% have overpaid by April. The refund comes through your Self Assessment return. We file in April or May so the money arrives in the summer instead of the following February. Keep every deduction statement.

Limited companies: deductions are set against the company’s PAYE and CIS bill each month on the Employer Payment Summary, and any balance is claimed at the year end. We run this inside the monthly payroll.

Gross Payment Status

Paid in full, no deductions, tax settled at the year end. HMRC checks 3 things:

• Tax returns filed and paid on time, VAT included since April 2024.
• Construction work done in the UK through a business bank account.
• Turnover of at least £30,000 (sole trader), £30,000 per partner or director, or £100,000 for the whole business, net of materials and VAT.

HMRC reviews the status every year. From April 2026 it can also cancel it straight away where a contractor knew, or should have known, of fraud in its supply chain, and the wait to reapply is now 5 years. We handle the application and keep the record clean afterwards.

The VAT Reverse Charge

Since 1 March 2021, a VAT registered subcontractor invoicing a VAT registered contractor for CIS work does not charge VAT. The contractor accounts for it on their own return.

• The invoice must state that the reverse charge applies.
• The subcontractor’s cash flow drops because VAT no longer comes in with the payment.
• Subcontractors in a permanent VAT repayment position should move to monthly returns.

Most new clients who come to us have this rule set up wrong on their invoices.

CIS Tax Deduction Calculator

Use the CIS deduction calculator to work out the net payment and deduction on a single invoice, check a statement a contractor has given you, or estimate your year-end refund.

Contact Us Today

Call +44 7756 548969 or fill in the Client Registration Form. Subcontractors with deduction statements and no return filed yet can send them over, and we will tell you what the refund looks like before you commit.