CIS accountant for subcontractors and contractors in Surrey
If you are paid net, 20% comes off your labour before it reaches you and goes to HMRC against a tax bill nobody has calculated yet.
For a lot of subcontractors that adds up to more than they end up owing — which means a refund, and one that only arrives if a return is filed to claim it.
What comes off, and why
| Your status | Deducted from labour |
|---|---|
| Registered with HMRC | 20% |
| Not registered | 30% |
| Gross payment status | 0% — you are paid in full |
Deductions apply to labour only. Materials, VAT and CIS-registered plant hire come out first — and if a contractor is deducting from your whole invoice, you are losing money that was never theirs to take.
Gross payment status is worth chasing, and the test got harder
Gross status means you are paid in full and settle your own tax later. For a growing subcontractor it transforms cash flow.
Three tests have to be met. The business test — construction work carried out in the UK, run largely through a bank account. The turnover test — at least £30,000 of net construction turnover, or £30,000 per partner or director. And the compliance test — every tax obligation filed and paid on time for twelve months.
From 6 April 2024, VAT was added to that compliance test. A late VAT return can now cost you gross payment status, which it could not before. HMRC also took wider powers to cancel it immediately where it suspects fraudulent information. If you hold gross status, your VAT filing has stopped being just a VAT issue.
If you are the contractor
The obligations sit with you, and the penalties start the day after the deadline.
Verify before you pay
Every subcontractor verified with HMRC before the first payment. Unverified means you must deduct 30%.
File by the 19th
The monthly CIS return is due on the 19th — including nil returns when you have paid nobody.
Pay over by the 22nd
Deductions paid to HMRC by the 22nd if electronically, the 19th by post.
Split labour and materials
Get it right on every invoice. Deducting from the whole figure is the most common error we see.
Statements to subcontractors
Payment and deduction statements issued monthly, so they can claim what they are owed.
Penalties escalate fast
£100 the day after, £200 at two months, then £300 or 5% of deductions at six.
Also relevant if you are self-employed in construction: quarterly digital reporting began in April 2026 for gross income over £50,000, and reaches £20,000 by April 2028. It is measured on turnover, not profit.
Schedule a 20 min Free Review with me.
I offer a review, not a sales call — which may or may not lead anywhere. Most people come away with two or three things worth far more than twenty minutes.
What we cover
- 01Whether you are owed a CIS refund, and roughly how much
- 02Whether you qualify for gross payment status
- 03Your CIS filing calendar, if you engage subcontractors