Accountants for Construction & CIS Subcontractors
If you're a CIS subcontractor, 20% of your gross invoices is being withheld at source — and most of it comes back as a refund at year-end, provided your expenses are claimed properly. £55/mo handles the lot.
How do you work?
The Construction Industry Scheme is how HMRC collects tax from self-employed trades working on construction sites. Main contractors are legally obliged to deduct 20% (or 30% if you're unregistered) from every invoice you raise and hand it to HMRC. At year-end, you reconcile that withholding against your actual tax liability — which is usually much less than the 20% they've taken, because your van, tools, fuel, PPE and materials are deductible. The difference comes back to you as a refund.
CIS subcontractors filing their own returns frequently under-claim expenses, with typical annual refunds of £2,000-£4,500 when calculated properly. Proper mileage logs, full kit purchases under Annual Investment Allowance, home-office proportion for admin, and phone/data apportionment are the commonly-missed categories.
Tax questions specific to construction & cis subcontractors.
Year-end refund claim
CIS deducts 20% of gross invoices. Your actual tax is 20% of profit after expenses. The gap is your refund — typically £2-4k for full-time subs claiming all legitimate expenses.
Van & vehicle costs
Mileage method (45p per mile first 10k) or actual-costs method (capital allowances + running costs). Most CIS trades win on actual-costs with AIA on the van purchase.
Tools & kit
Power tools, hand tools, PPE, safety gear — fully deductible under Annual Investment Allowance in year one, or proportioned for partial personal use.
Gross payment status
If you meet turnover, compliance and UK residency criteria, you can apply for gross payment status — contractors pay you full invoice without the 20% deduction. Huge cashflow benefit.
Cash-heavy records
Cash payments are legal if declared. The challenge is keeping consistent records HMRC won't query. Clean cashbook, regular banking, receipt tracking — all part of the service.
Late returns & penalties
Missed a January deadline? Accountants in our network file late returns regularly, negotiate penalty reductions on reasonable grounds, and get you current on HMRC. 7-10 day turnaround.
The expenses CIS subs routinely miss.
The 20% CIS deduction is based on your gross invoice. Your actual tax is 20% of profit — gross income minus allowable expenses. Every pound of legitimate expense you don't claim is 20p of tax you've paid unnecessarily. The big ones CIS subs miss:
Proper mileage records
Every business mile is 45p allowable for the first 10,000, 25p thereafter. A full-time CIS sub driving to multiple sites clocks up £5,000-£10,000 of mileage annually. Without a log, HMRC can disallow this. With a log — even a simple notebook or phone app — it's yours.
Tools bought in cash
Builders merchants, Screwfix, Toolstation — if you paid cash and never kept the receipt, no deduction. Start photographing receipts on the spot. Under AIA, tools bought for business use are 100% deductible in year one.
Home office for admin
Even for field-based trades, a portion of home costs is claimable for the time spent on admin, quoting, invoicing, chasing payments. Flat-rate £10-£26/month or proportional depending on actual use.
Phone & data
Business proportion of your personal phone and data bills, plus any dedicated business line. Usually 40-70% for trades, depending on how you work.
Public liability & tool insurance
Essential for most trades, fully deductible. Often forgotten on self-filed returns.
Workwear & PPE
Branded workwear, hi-vis, safety boots, overalls, hard hats — all allowable. Ordinary clothing that happens to be worn for work isn't.
The services most construction & cis subcontractors use.
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Read moreIndustry-specific questions.
How much CIS tax do I typically get back?
Depends on your expenses. CIS deducts 20% of gross invoices. Your actual tax is 20% of profit after expenses. For full-time CIS subs claiming all legitimate expenses (van, tools, fuel, PPE, insurance, phone, home-office proportion), annual refunds commonly run £2,000-£4,500. First-year refunds after switching to proper expense tracking are often higher than later years, because previous self-filed returns typically missed deductions.
I'm not CIS-registered and they're deducting 30%. How do I fix that?
Register for CIS immediately — HMRC online, takes 10 minutes. The 30% rate applies to unregistered subs; registration drops you to 20%. Backdated refund claims for the overpaid 10% can be made against your next tax return. Accountants in our network handle the registration and the reclaim.
Can I get gross payment status to avoid CIS deductions altogether?
Yes if you meet the criteria: turnover threshold (£30k for sole traders), compliant recent tax history (no late filings or unpaid tax), and UK business. Gross payment status means contractors pay you the full invoice without deducting 20% — huge cashflow improvement. Accountants in our network handle the application. Worth it once turnover is stable above £40-50k.
I've been working for years without declaring properly. Can I sort it now?
Yes, and better now than later. We use HMRC's Let Property Campaign (for rental income) or the general disclosure facility (for trading income) to bring you current with reduced penalties. Multiple years of back-filing is routine. Coming forward voluntarily cuts penalties substantially vs HMRC finding you first.
I bought a £25k van this year. How much can I claim?
The full £25k in year one, under Annual Investment Allowance, if the van is used wholly for business. Commercial vans (not cars) qualify for 100% first-year relief under AIA up to £1m/year. That £25k directly reduces your taxable profit — at a 20% marginal rate that's £5k of tax saved in year one. For CIS subs, this typically takes your first-year profit well below your CIS withholding, producing a larger-than-usual refund.
Do I need to register for VAT?
Only if your rolling 12-month turnover exceeds £90k. Most sole-trader CIS subs stay below that deliberately. Once above, the decision between Standard VAT and Flat Rate needs modelling — for construction trades with substantial material costs, Standard VAT usually wins because input VAT on materials is reclaimable. Accountants in our network run the numbers when you approach the threshold.