Construction &
Tradesmen Accountants Essex

Since 1 March 2021, when a VAT-registered construction business supplies construction services to another VAT-registered business (other than an end user), the customer must account for the VAT — not the supplier. This is called the domestic reverse charge. It significantly affects cash flow. We apply it correctly for all Essex construction businesses.

Yes. A van used for business purposes is an allowable expense — you can claim capital allowances on the purchase cost and running costs including fuel, insurance, servicing and repairs. Hand tools, power tools, plant hire and safety equipment are also allowable. With Annual Investment Allowance (AIA) of up to £1 million, Essex tradesmen can deduct 100% of qualifying equipment costs in the year of purchase.

HMRC applies strict tests to determine employment status. Genuine subcontractors who have control over how they do their work, provide their own equipment, take financial risk and work for multiple clients can be self-employed. Workers who are directed by the contractor, use the contractor's tools and work regular hours for one employer are likely employees. Getting this wrong means unpaid PAYE and NIC penalties. We advise Essex contractors on correctly classifying their workforce.

CIS deductions suffered are offset against your income tax liability. As a sole trader, they appear on your self-assessment return. As a limited company, they offset your corporation tax or can be reclaimed. We ensure all CIS deductions are tracked and correctly reclaimed, often resulting in a tax repayment for Essex subcontractors.

You must register for VAT once your taxable turnover exceeds £90,000 in any 12-month period. Voluntary registration can benefit tradesmen who work primarily with other VAT-registered businesses, allowing them to reclaim VAT on purchases. With the reverse charge in construction, VAT cash flow is more complex — we advise Essex tradesmen on the most beneficial position.

Many established Essex tradesmen incorporate to benefit from lower corporation tax rates and the ability to pay dividends rather than salary. However, incorporation has costs and administrative obligations. The right decision depends on your profit level, risk profile and long-term plans. We provide a personalised analysis for every Essex tradesman considering incorporation.

Call us on 01268 799919 or fill in the contact form. We provide a free initial consultation, review your current CIS, VAT and tax situation and give you a transparent quote. We love working with Essex construction businesses and take the entire financial burden off your hands.