CIS Tax Reclaims and Gross Payment Status: What Salford Contractors Need to Know

The Construction Industry Scheme (CIS) plays a central role in ensuring tax compliance for contractors and subcontractors working in the UK construction sector. For those operating in Swinton, Salford, and surrounding areas, understanding the mechanisms of CIS tax reclaims and gross payment status is vital to maintaining cash flow, reducing risk, and ensuring full compliance with HMRC requirements.

At Co-gency Chartered Accountants, we provide specialist support to construction firms navigating these rules. This article outlines the key aspects of CIS deductions, the process of reclaiming overpaid tax, and the criteria for achieving gross payment status, offering practical advice for construction businesses seeking clarity and control.

The Construction Industry Scheme is administered by HMRC and governs how payments are made from contractors to subcontractors. Under the scheme, contractors must deduct a percentage of payments to subcontractors and pass this amount to HMRC as advance payment towards corporation tax, income tax and National Insurance contributions. This system is designed to tackle tax evasion and ensure better oversight in an industry that often involves complex subcontracting arrangements.

Subcontractors registered with HMRC under the CIS typically face a deduction rate of 20 per cent. Those who are not registered may see a higher rate of 30 per cent deducted from their payments. This deducted amount is then offset against the subcontractor’s total tax liability at the end of the financial year.

Further information on how CIS operates is available from the UK government:
Construction Industry Scheme: A guide for subcontractors – GOV.UK

The structure of CIS often results in subcontractors paying more tax than is necessary over the course of the year. This is particularly true when allowable business expenses are taken into account. These might include equipment purchases, vehicle and fuel costs, insurance, accommodation, and materials.

Subcontractors must submit a Self Assessment tax return to HMRC that accurately reflects their income and business costs. If the amount of tax deducted exceeds their actual liability, they may be eligible for a refund.

A successful tax reclaim requires detailed recordkeeping and precise accounting. At Co-gency Chartered Accountants, we help clients identify all allowable expenses, prepare complete returns, and deal directly with HMRC to ensure refunds are processed promptly.

Gross payment status (GPS) enables registered subcontractors to be paid in full by contractors, without any CIS deductions. This can be a valuable advantage for cash flow and business planning, as it allows subcontractors to manage their own tax payments through Self Assessment.

To qualify for GPS, a subcontractor must meet specific criteria set by HMRC:

• The business must operate in the UK construction industry
• It must demonstrate a turnover of at least £30,000 per individual or £100,000 for the entire business if a company
• It must have a good compliance record with no late tax returns or payments

Applications for gross payment status can be submitted online via the Government Gateway. HMRC reviews eligibility annually, and failure to remain compliant can result in loss of status.

Further details on gross payment status can be found here:
Apply for gross payment status – GOV.UK

The complexities of the Construction Industry Scheme mean that general accounting services may not be sufficient for construction businesses. CIS involves ongoing reporting obligations, annual Self Assessment, possible VAT and PAYE compliance, and frequent HMRC correspondence. An accountant with sector-specific experience can offer far more than routine bookkeeping.

At Co-gency Chartered Accountants, we work closely with contractors and subcontractors across Salford and Swinton to provide:

• Full CIS tax reclaim support, ensuring no deductions go unclaimed
• Monitoring and maintenance of gross payment status
• Strategic cash flow planning for project-based operations
• Digital recordkeeping support in preparation for Making Tax Digital requirements

We also provide tailored construction accounting services, helping clients manage project costs, evaluate margins, and remain competitive in a highly regulated and dynamic market.

To learn more about our specialist services, visit:
Construction Accounting Services – Co-gency

Construction firms in Swinton and Salford operate within a distinct regional business environment, where industry connections, seasonal fluctuations, and payment practices may differ from the national norm. Our local insight allows us to tailor advice and strategies that fit the specific needs of businesses operating in Greater Manchester and the Northwest.

We work with a wide range of construction clients, including limited companies, sole traders, and partnerships, delivering proactive tax and financial support that reflects the realities of working in this fast-paced sector.

If you are a contractor or subcontractor working under CIS in Swinton or Salford, expert support can help you streamline your finances, reduce your tax burden, and stay fully compliant.

To speak with a CIS specialist accountant, contact Co-gency today.
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