Industry
Accountants for construction businesses
CIS, reverse charge VAT, retentions and contract-level costing for builders and civils contractors.
Overview
Your sector, in practice
Construction has more accounting complexity per pound of turnover than almost any other sector. CIS, the domestic reverse charge, retentions, applications for payment, work in progress and long payment cycles all interact — and all affect cash before they affect profit.
We act for builders, groundworkers, civils contractors and specialist subcontractors across Scunthorpe and North Lincolnshire, where a lot of work flows through the industrial supply chain and public sector frameworks.
Challenges
What makes this sector different
Cash locked in retentions
Retentions of 3–5% held for months after practical completion sit on the balance sheet as profit while doing nothing for cash.
Domestic reverse charge
Since the rules changed, many subcontractors no longer collect VAT on sales and have moved into a permanent repayment position they were not prepared for.
Contract profitability
Without job costing, a loss-making contract is only identified when the whole year's figures disappoint.
Work in progress
Valuing uncertified work at year end is judgement-heavy and materially changes both profit and tax.
Tax and accounting
Key considerations
Gross payment status
Achieving and keeping gross status transforms cash flow. The compliance tests are strict and worth actively managing.
Monthly CIS returns
Due by the 19th each month with penalties from day one, even for nil returns.
Monthly VAT returns
Where reverse charge puts you into repayment, monthly returns bring the money back four times faster.
Plant purchase versus hire
The capital allowance position, finance treatment and utilisation rate all feed the decision.
How we help
Our work for these businesses
- Subcontractor verification and monthly CIS returns
- Reverse charge configuration in Xero, QuickBooks or Sage
- Job costing setup with contract-level margin reporting
- Retention tracking and recovery discipline
- Applications, valuations and WIP at year end
- Gross payment status applications and compliance monitoring
Watch out
Common mistakes we see
- Applying VAT to reverse charge supplies out of habit
- Failing to verify a new subcontractor before the first payment
- Treating labour-only subcontractors as outside CIS without checking
- Ignoring retentions until they are statute barred
- Pricing new work from last year's material costs
FAQs
Construction questions
It generally applies to construction services between VAT-registered businesses within the CIS chain, unless your customer is an end user or intermediary supplier who has confirmed that status in writing. We review your customer base and set the rules up in your software.
Enquire
Tell us about your business
A short conversation is usually enough for us to tell you whether we can improve on what you have now.
Related services
Services that work alongside this
- BookkeepingAccurate, reconciled records kept up to date weekly or monthly, so VAT, payroll and year-end all take care of themselves.
- PayrollFully managed payroll with RTI filing, pension auto enrolment and payslips delivered on schedule, every period.
- Management AccountsMonthly or quarterly reporting that shows margin, cash and tax exposure while you can still do something about them.
- VATRegistration, scheme selection, quarterly returns and the awkward questions — reverse charge, partial exemption and cross-border supplies.
Related industries
Businesses we work with
- ContractorsLimited company contractors and CIS subcontractors — status, extraction and cash flow handled properly.
- EngineeringProject costing, long-term contracts, R&D relief and skilled-labour payroll for engineering firms.
- TradesStraightforward accounting for electricians, plumbers, joiners, roofers and groundworkers.
- PropertyDevelopers, investors and property companies — structure, VAT on development, appraisals and funding.