Stratford-upon-Avon
13 The Courtyard
Timothy's Bridge Road
Stratford-Upon-Avon
Warwickshire CV37 9NP
The Construction Industry Scheme (CIS) is used within the UK construction sector to help manage payments between contractors and subcontractors effectively. This scheme mandates that contractors deduct a portion of payments made to subcontractors, remitting these funds directly to HMRC. These deductions function as advance payments towards the subcontractor’s tax and National Insurance obligations.
A significant administrative update to the CIS scheme took effect from 6 April 2026. From this date, construction contractors are once again required to file a nil return for any month in which they have not paid subcontractors. This reinstatement of the nil filing obligation aims to prevent erroneous late filing penalties that previously arose when contractors did not make payments but also did not inform HMRC. Contractors are required to either file a nil return or notify HMRC in advance if they will not be making any subcontractor payments for a given month; failure to do so without a reasonable excuse could result in penalties.
For any business operating within the construction sector, whether based in the UK or abroad, a thorough understanding of the CIS regulations is important. Beyond mere compliance, accurate registration, precise deductions, and punctual submissions are fundamental to sound financial governance and crucial for avoiding potential penalties.
Contractors are required to register for the scheme. While subcontractors are not required to register, a higher rate of deduction will be applied to their payments if they are unregistered. Registered contractors can use CIS online to file monthly returns or verify subcontractors.
Businesses must register as a contractor if they pay subcontractors for construction work, or if their business, despite not performing construction work itself, has spent over £3 million on construction in the 12 months since its first payment. Registration as a subcontractor is required if a business undertakes construction work for a contractor. If a business meets the criteria for both, it must register as both a contractor and a subcontractor.
Grenfell James Technology Adoption Index
How does your business perform against others adopting financial tech? Find out with our interactive diagnostic:
1.
How does your business receive invoices?
A)
Invoices are mainly received in paper form
B)
Invoices are mainly received by email
C)
Invoices are emailed then automatically forwarded to a designated mailbox
2.
How are purchase invoices processed?
A)
Invoices are entered manually
B)
Invoices are attached to manually raised invoices
C)
Automated software (e.g. ReceiptBank, 1Tap, HubDoc etc) collates invoices
3.
How are accounts processed?
A)
Using Excel/paper-based
B)
Using Computer-based, offline software
C)
Using cloud-based accountancy software
4.
How often is business data revised?
A)
Data is updated annually
B)
Data is updated quarterly
C)
Data is updated monthly or more often
5.
How is banking updated for your business?
A)
Banking is updated manually
B)
Banking is updated by imports
C)
Banking is updated via a live feed
6.
How are bank payments made?
A)
Bank payments are manual
B)
Bank payments are made using bulk imports
C)
Bank payments are made directly via accounting software
7.
How are bank receipts reconciled?
A)
Receipts are chased and reconciled manually
B)
Receipts are chased and reconciled automatically
C)
A third-party platform is used to chase debts and collect fees
8.
How often are management reports produced?
A)
No reports are provided
B)
Reports are provided but often too late to be valuable
C)
Reports are automated with real-time information
Score 8-12:
Curious Exploration
Your financial technology phase is Curious Exploration
% of respondent businesses are in this phase too.
Switching accountancy systems may seem like an upheaval, but can be much more straightforward than most businesses imagine. From talking to our clients, they have found moving from paper invoicing and desktop-based accounting software to the cloud and apps quickly makes the transition process a worthwhile investment of time. Digital accounting solutions bring in streamlined processes, up-to-date business data and greater confidence in the accuracy of information when making financial decisions.
Grenfell James works with your team to fully assess the needs of your business and minimise the impact of any transitions for solutions we recommend.
Score 13-19:
Measured Discovery
Your financial technology phase is Measured Discovery
% of respondent businesses are in this phase too.
Once cloud accountancy software is in place, there’s still plenty of scope to improve your accountancy processes and make sure your business is maximising the benefits of adopting a digital accounting solution. Grenfell James assesses each business to understand how any implemented solutions are being used, identify areas for improvement and the needs of the business overall to support your business goals and achieve success.
Our team of experts can discuss a range of time-saving automation and get different apps and cloud-based solutions talking to create and manage a digital accountancy eco-system to help your business grow.
Score 20-24:
Bold Innovation
Your financial technology phase is Bold Innovation
% of respondent businesses are in this phase too.
You know the benefits of accounting technology and the impact it can have on your business goals. If you want to take it a step further, our team can conduct a systematic review of your processes, apps and business goals to ensure your digital accountancy ecosystem is keeping pace with the changing needs of a growing business.