Accountants for construction in Edinburgh.

The Construction Industry Scheme is HMRC's system for deducting tax at source from payments to construction subcontractors. If you are a contractor — you pay other subcontractors for construction work — you must register as a CIS contractor and verify each subcontractor before their first payment. If you are a subcontractor — you receive payments for construction work from contractors — you should register so deductions are made at 20% (registered) rather than 30% (unregistered). Zero deductions apply if you hold gross payment status. CIS covers most construction activity, including building work, alterations, repairs, demolition, and civil engineering.

Under the domestic reverse charge (in force since March 2021), when a VAT-registered subcontractor supplies construction services to a VAT-registered contractor, the contractor accounts for VAT on the supply rather than the subcontractor charging it. The subcontractor's invoice should state 'Reverse charge: customer to account for VAT' and show the net amount only — it does not include VAT. The contractor then accounts for both the output VAT (as if it had charged it) and the input VAT (as a normal purchase) on the same return, which typically nets to zero. Cash flow improves for subcontractors who no longer collect VAT from contractors.

Yes, if you meet HMRC's three tests: a business test (the work is construction and not just supply of materials), a turnover test (net construction turnover of at least £30,000 per year for a sole trader, or £30,000 per director/partner for a company), and a compliance test (all tax returns and payments up to date for the preceding 12 months). Once granted, HMRC reviews it annually; any missed return or late payment can trigger withdrawal, which reverts you to 20% deductions until reapplied.

Plant, machinery, scaffolding and construction equipment qualify for capital allowances — specifically the Annual Investment Allowance, which gives 100% relief on up to £1 million of qualifying expenditure per year. Larger capital purchases beyond the AIA or assets that don't qualify (such as cars) use writing-down allowances at 18% or 6%. The distinction between capital expenditure (going through capital allowances) and revenue expenditure (deducted in the year) is important for plant: a repair is revenue, a replacement or improvement is capital. We classify and claim correctly, which affects both current-year tax and balance sheet asset values.