How Can an Accountant Help Contractors Stay Compliant Under CIS

At Towerstone Accountants we provide specialist CIS accountancy services for contractors, subcontractors, and construction businesses across the UK. We created this webpage for people working in construction who want clear guidance on CIS, including registration, deductions, refunds, and common compliance tasks, without jargon. Our aim is to help you stay compliant with HMRC, avoid costly errors, and keep your records in good order.

If you are a contractor in the construction industry the Construction Industry Scheme can quickly become one of the most time consuming and stressful parts of running your business, I see it all the time, work on site is demanding, cash flow is tight, deadlines move, and then on top of that you are expected to understand verification rules deduction rates monthly returns payment deadlines and penalties, it is no surprise that many contractors worry about getting it wrong.

From my own experience working with construction businesses of all sizes I can say that most CIS problems are not caused by deliberate non compliance but by misunderstanding or overload, contractors are focused on getting jobs done and paid, CIS admin sits in the background until something goes wrong, and by the time HMRC get in touch the issue has often been building for months.

This is where a good accountant makes a real difference, not just by filling in forms but by setting systems up properly, keeping you on track month by month, and acting as a buffer between you and HMRC when questions arise, in this article I am going to explain in practical terms how an accountant can help contractors stay compliant under CIS, reduce risk, and free up time to focus on the business itself.

Understanding CIS obligations clearly from the outset

One of the first ways an accountant helps is by making sure you understand exactly what your CIS obligations are as a contractor, this sounds basic but it is where many issues begin.

Contractors need to register for CIS, verify subcontractors, deduct the correct amount of tax, submit monthly returns, issue deduction statements, and pay deductions to HMRC on time, missing any one of these steps can trigger penalties.

An accountant helps map this out clearly, explains what applies to your specific business, and ensures nothing is overlooked, this clarity alone often reduces stress significantly.

Registering correctly and setting CIS up properly

Getting CIS set up correctly at the start matters far more than most people realise, registering late or incorrectly can lead to missed returns and automatic penalties.

An accountant will ensure you are registered as a contractor when required, that HMRC records are correct, and that the CIS scheme is linked properly to your PAYE account where necessary.

They will also help set up systems to record subcontractor details invoices and deductions in a way that ties into your accounting records, which makes ongoing compliance far easier.

Verifying subcontractors and applying the correct deduction rate

Verification is a core part of CIS compliance, every subcontractor must be verified with HMRC before payment, and the result of that verification determines whether tax is deducted at 20 percent 30 percent or not at all.

Accountants handle this process routinely, they ensure subcontractors are verified promptly and that the correct deduction rate is applied, this avoids over or under deductions which can cause disputes with subcontractors and problems with HMRC.

In practice this also protects contractors from accusations of careless errors which can lead to penalties.

Ensuring deductions are calculated correctly

CIS deductions should usually apply to the labour element of a subcontractor’s invoice, not to materials or VAT, this is an area where mistakes are common especially when invoices are unclear.

An accountant reviews invoices and ensures deductions are calculated correctly, they can also advise subcontractors on how to present invoices properly to reduce errors.

Correct calculation matters not just for compliance but for maintaining good relationships with subcontractors, incorrect deductions often lead to tension and delays.

Preparing and submitting monthly CIS returns on time

Monthly CIS returns are one of the biggest ongoing admin burdens for contractors, they must be submitted by a strict deadline every month even if no subcontractors were paid.

An accountant takes responsibility for preparing and submitting these returns accurately and on time, including nil returns where required, this alone eliminates one of the most common sources of penalties.

They also ensure that returns match payment records which reduces the risk of HMRC queries.

Issuing CIS deduction statements to subcontractors

Contractors must provide subcontractors with deduction statements showing what has been paid and what tax has been deducted, these statements are important evidence for subcontractors when they complete their own tax returns.

Accountants ensure these statements are issued correctly and on time, this helps subcontractors stay compliant and reduces the risk of disputes.

From a contractor’s point of view it also demonstrates professionalism and good record keeping.

Managing CIS payments to HMRC

Submitting a CIS return is only part of the process, the tax deducted must also be paid to HMRC by the relevant deadline.

An accountant will calculate the correct amount due taking into account CIS deductions and any offsets, and ensure payments are made on time, this avoids late payment interest and penalties.

They can also help manage cash flow by forecasting upcoming liabilities so there are no surprises.

Keeping CIS records organised and compliant

HMRC require contractors to keep CIS records for several years, including subcontractor details verification results invoices payments and returns.

Accountants help set up and maintain proper record keeping systems, often using accounting software, which makes compliance checks far less stressful if they occur.

Good records also make it easier to spot issues early and correct them before they escalate.

Dealing with HMRC queries and compliance checks

If HMRC raise a query or open a compliance check having an accountant involved is invaluable, they understand what HMRC are looking for and how to respond appropriately.

An accountant can communicate with HMRC on your behalf, provide requested information, explain any errors, and negotiate where appropriate, this often leads to faster resolution and better outcomes.

For contractors this removes a significant burden and reduces the risk of saying the wrong thing.

Identifying and correcting errors proactively

Mistakes do happen, even in well run businesses, what matters is how quickly they are identified and corrected.

An accountant regularly reviews CIS processes and returns, spotting errors early and submitting amendments where needed, correcting issues proactively is always viewed more favourably by HMRC than waiting to be challenged.

This proactive approach often prevents penalties or reduces their severity.

Advising on employment status and workforce structure

One of the biggest CIS risks is misclassifying workers, paying someone under CIS when they should be on PAYE can lead to significant liabilities.

Accountants advise on employment status, help assess whether workers should be treated as employees or subcontractors, and ensure the correct system is used.

This guidance protects contractors from one of the most costly CIS related mistakes.

Integrating CIS with wider tax and accounting obligations

CIS does not exist in isolation, it interacts with payroll VAT corporation tax and Self Assessment, an accountant helps ensure everything aligns.

For example CIS deductions can affect PAYE liabilities, VAT treatment can affect invoices, and accounting records must reflect deductions correctly, having one adviser overseeing the whole picture reduces the risk of inconsistencies.

Supporting growth and scaling under CIS

As a construction business grows CIS obligations often become more complex, more subcontractors more sites and higher volumes increase the risk of error.

An accountant helps put scalable systems in place, ensuring compliance keeps pace with growth rather than becoming a bottleneck.

They can also advise on when it might make sense to bring roles in house or adjust structures from a tax and compliance perspective.

Saving time and reducing stress

Beyond technical compliance one of the biggest benefits of using an accountant is the time and mental space it frees up, contractors can focus on running sites managing teams and winning work rather than worrying about deadlines and penalties.

In my experience this peace of mind is often as valuable as the financial savings.

Final thoughts from experience

The Construction Industry Scheme is detailed and unforgiving when it is misunderstood, but it is manageable with the right support.

An accountant helps contractors stay compliant by setting things up properly, keeping everything running smoothly month by month, and stepping in when issues arise, the result is fewer penalties fewer disputes and more confidence.

For contractors who want to focus on building their business rather than battling admin having an accountant who understands CIS is not a luxury, it is a practical investment in stability and growth.

You may also find our guidance on How can an accountant help with CIS bookkeeping and How can I appeal a CIS penalty helpful when dealing with related CIS questions. For a broader overview of CIS rules, compliance, and support, you can visit our cis guidance hub.