CIS Contractors accounting, handled.

Sick of 20% (or 30%) being skimmed off every invoice, with no clear path to getting it back?

Looking for an accountant for CIS contractors who actually understands the Construction Industry Scheme inside out? Whether you're a subcontractor losing 20% (or 30%) to deductions on every invoice, or a contractor wrestling with monthly CIS300 returns and subcontractor verification, Zmartly is an ACCA-qualified practice that handles CIS day in, day out. We reclaim your over-deducted tax fast, keep your filings clean, and help the right people win gross payment status, all on fixed monthly pricing with a named accountant who replies within 72 hours.

4.9 Google · 63 reviews
ACCA-qualified
30-day money-back

Book your call See pricing

ACCA-qualified accountant reviewing financials

CIS for contractors and subcontractors

Construction Industry Scheme: deduction rates and gross status at a glance

Under the Construction Industry Scheme (CIS), contractors deduct tax from a subcontractor's labour payments at source and pass it to HMRC, with the rate set by the subcontractor's verification status for the 2026/27 tax year.

Mileage: 55p per mile for the first 10,000 business miles, then 25p thereafter
Annual Investment Allowance: 100% relief on qualifying plant and equipment up to £1,000,000
Trading allowance: first £1,000 of casual/trading income tax-free
VAT registration threshold: £90,000 of taxable turnover

Status	Deduction rate	Notes
Registered (verified)	20%	Standard rate once HMRC verifies the subcontractor under CIS.
Unregistered (not verified)	30%	Higher rate applied where the subcontractor cannot be verified.
Gross payment status	0%	Paid in full, no deduction; settles tax via Self Assessment or Corporation Tax.
Gross status test (per partner/director)	£30,000 net	Turnover test per partner or director, excluding materials and VAT.
Gross status test (whole entity)	£100,000 net	Alternative whole-business turnover threshold for the entity.

Heads up, Since 1 March 2021 the VAT domestic reverse charge applies to most CIS construction services between VAT-registered businesses, so the customer accounts for the VAT rather than the subcontractor charging it.

Tailored services

Everything you need for cis contractors.

01
CIS deduction rates and what they really mean
There are three CIS rates: 20% for subcontractors registered and verified with HMRC, 30% for those who aren't registered or can't be matched, and 0% for those holding gross payment status. The deduction only applies to labour, genuine materials, plant hire, consumable stores, fuel (other than for travel) and VAT are stripped out of the gross invoice first, provided you can evidence them. We make sure your invoices and records separate labour from materials so you're never deducted on more than you should be.
02
Subcontractor verification and monthly CIS300 returns
Before a contractor's first payment to any subcontractor, they must verify them with HMRC to confirm the correct deduction rate; an unmatched subcontractor must suffer the higher 30% rate. Each month the contractor files a CIS300 return reflecting exactly what was paid and deducted, due by the 19th, with a nil return or inactivity request needed in quiet months. We handle verification, the return and the payment-and-deduction statements your subcontractors rely on for their own refunds.
03
Gross payment status, the three qualifying tests
To win gross payment status you must pass the business test (a genuine construction business run through a UK bank account), the turnover test (net construction turnover, excluding VAT and materials, of at least £30,000 per partner or director, or over £100,000 for the whole entity), and the compliance test (all CIS and tax returns and payments correct and on time). HMRC reviews the status annually and can withdraw it, so we keep your compliance spotless to defend it.
04
The VAT domestic reverse charge for construction
For standard or reduced-rate construction services reported under CIS, supplied between two VAT-registered businesses where the customer isn't the end user, the reverse charge applies: the supplier doesn't charge VAT and the customer accounts for it on their own return. It catches labour-only subcontractors too. It doesn't apply to supplies to end users or to non-VAT-registered customers. We configure your accounting software so both invoicing and returns treat it correctly.
05
VAT registration and the £90,000 threshold
Many growing CIS businesses cross the VAT registration threshold of £90,000 of taxable turnover (with deregistration at £88,000). Once registered, the reverse charge often means you reclaim input VAT on materials and tools while charging little or no output VAT to contractor customers, frequently producing repayment positions. We advise on timing, the Flat Rate Scheme suitability (usually poor for reverse-charge work) and ongoing returns.
06
Self Assessment, MTD and your wider tax picture
Beyond CIS, we handle your full Self Assessment, claiming allowable expenses, simplified mileage at 55p per mile for the first 10,000 business miles then 25p, capital allowances on tools and vehicles (the Annual Investment Allowance covers up to £1,000,000 of qualifying plant), and the £1,000 trading allowance where it helps. With Making Tax Digital for Income Tax arriving for sole traders and landlords over £50,000 from April 2026, we get your quarterly digital record-keeping ready early.

How we work

Four steps from first call to filed.

01
Discovery
Understanding your business needs.
02
Solution Design
Crafting your custom accounting strategy.
03
Onboarding
Quick and easy integration.
04
Regular Rhythm
Consistent monitoring and reporting.

Tax guides worth a read

Plain-English explainers, kept current with the latest HMRC rules.

All insights & guides

Trusted by leading innovators

Common questions

Frequently asked questions.

Very often, yes. Your contractor deducts 20% of your labour and pays it to HMRC as an advance against your tax. Once we apply your personal allowance, deduct your allowable expenses (tools, mileage, insurance, protective clothing, use of home) and account for any materials you supplied, the tax actually due is usually far less than what was deducted, so HMRC repays the difference after your Self Assessment is filed for the year ended 5 April.

20% applies if you're registered as a subcontractor and HMRC can verify you against your details. 30% is the penalty rate for subcontractors who aren't registered for CIS or can't be matched when the contractor verifies them. Registering is quick and free, and we'll do it for you, it's almost always worth dropping from 30% to 20%, and better still to apply for 0% gross payment status.

You apply to HMRC and must pass three tests: a genuine UK construction business run through a business bank account, net turnover of at least £30,000 per partner or director (excluding VAT and materials), and a clean compliance record. It's worth it if cashflow matters, you're paid in full and settle tax at year end rather than waiting for a refund. The catch is HMRC's annual review: one late CIS return or payment can lose you the status, so we keep your filings watertight.

If both you and your customer are VAT-registered, the work is reported under CIS, and your customer isn't the end user, then yes, the domestic reverse charge applies. You don't charge VAT on that invoice; your customer accounts for it. It doesn't apply when you supply an end user (like a homeowner) or a non-VAT-registered customer. We set your software up so it's applied automatically and your returns stay correct.

You must verify each subcontractor with HMRC before their first payment, deduct at the right rate (20%, 30% or 0%), give each subcontractor a payment and deduction statement, file a CIS300 monthly return by the 19th, including a nil return in quiet months, and pay the deductions to HMRC by the 22nd (electronic) or 19th (post). Miss a return and automatic penalties start at £100. We run the whole monthly cycle for you.

Yes. We work with Xero, QuickBooks, FreeAgent and Sage, and we'll configure the CIS and reverse-charge settings correctly on whichever you use. If you don't have software yet, we'll recommend the best fit for a construction business, particularly important ahead of Making Tax Digital for Income Tax, which starts for those with income over £50,000 from April 2026.

We use fixed, transparent pricing, £99, £199 or £499 per month depending on whether you're a subcontractor, a contractor running monthly CIS returns, or a limited company needing the full package. It's rolling monthly with no long tie-in, you get a named ACCA-qualified accountant who replies within 72 hours, and we back it with a 30-day money-back guarantee.

Got a different question?

Free · 30 minutes · No obligation

Stop overpaying tax. Start filing in 5 days.

Thirty minutes with an ACCA-qualified accountant. Most owners uncover £1,000-£3,000 in annual savings on the first call. If we are not the right fit, you walk away with a free tax review on the house.

Book my Tax Health Check Call 020 8175 5145