Tradesmen accounting, handled.

If you're registered as a CIS subcontractor, contractors deduct 20% from your labour (not materials) and pay it to HMRC as an advance against your tax and National Insurance. If you're not registered it jumps to 30%. With gross payment status you're paid in full and settle your tax at year end. Because the 20% is taken before expenses, most subbies are due a refund once we deduct tools, van, mileage and other costs.

Usually, yes. The 20% (or 30%) deducted is an advance payment, not a final tax. Once your real profit is worked out after allowable expenses, you've often overpaid, so the Self Assessment produces a refund. We reconcile every CIS payment-and-deduction statement against your contractor records to make sure the full credit is claimed and the refund isn't understated.

The domestic reverse charge applies when a VAT-registered subcontractor supplies standard or reduced-rated construction services to a VAT-registered contractor who isn't the end user. You don't charge VAT, the contractor accounts for it. Your invoice must state the reverse charge applies and show the VAT rate and amount the customer must account for. It doesn't apply if your customer is the end user, such as a domestic homeowner paying you directly.

Tools, protective clothing and boots, public liability insurance, materials, tool and plant hire, your van running costs or 55p per mile for the first 10,000 business miles (then 25p), a proportion of phone and home-office costs, trade subscriptions and CITB levies. Vans qualify for the Annual Investment Allowance, giving full tax relief in the year of purchase. The trick is claiming everything you're entitled to without crossing into what HMRC disallows, which is where we earn our fee.

Gross payment status means contractors pay you in full with no 20% deduction, you settle tax yourself at year end, which massively improves cashflow. To qualify you generally need £30,000 of net construction turnover (excluding VAT and materials) in the last 12 months, plus passing HMRC's compliance and business tests. From April 2026 HMRC can remove GPS immediately for non-compliance, so staying on top of filings matters. We assess, apply and protect it for you.

You must register once your VAT-taxable turnover exceeds £90,000 in any rolling 12 months. Below that it's optional. For labour-heavy trades the Flat Rate Scheme can backfire, the limited cost trader rules force a 16.5% rate that often costs more than standard VAT, especially alongside the reverse charge. We run the comparison before you commit either way.

It depends on your profit, how you take money out, and your CIS and VAT position. A company pays 19% Corporation Tax on profits up to £50,000 and can be more efficient once profits are steady, but adds admin and changes how CIS deductions flow. For many trades the crossover sits somewhere in the £40,000-£50,000 profit range, but it's individual, we model both before you decide.