The construction industry has some specific accounting and taxation requirements, as well as business practices which need to be reflected in the software used to run the business. This guide focuses on considerations which are specific to the construction industry. 

We suggest you read this in conjunction with either our selecting business software guide (for medium and large organisations) or our selecting business software for small business success. These provide tips and tricks relevant to selecting all types of business software. You may also find our 10 things to consider when purchasing accounting software useful. 

Consider how important each of the following things are to your business based on transaction volumes and the way you operate. Which of these are currently most time-consuming and would benefit significantly from automation using software?

1. Monthly Construction Industry Scheme (CIS) returns

As a construction business you will need to submit a monthly CIS300 Return to HMRC covering payments to subcontractors. If you have a very small number of subcontractors, then this can be keyed into the HMRC Portal. For larger numbers of subcontractors, it is important to have software which can automate this submission. 

Some construction accounting software can create and submit these returns directly from the accounting records – this is generally the best approach where possible. Where this is not available, it may be possible to export data to separate CIS software which can create and submit the return. Both methods are more efficient and have lower risk of errors than keying the return into the HMRC Portal.

2. CIS verification of subcontractors

Before paying any new subcontractor for the first time, they need to be verified with HMRC. This can be done manually via the HMRC Portal – but if you deal with larger numbers of subcontractors, automation can improve efficiency. 

Some construction accounting software can verify subcontractors electronically with HMRC once the subcontractor has been added to the system. Separate CIS software is also available which can do this verification. 

Generally, it is best if the same software is used for verification as for the monthly CIS300 Return as the subcontractor verification details are needed for inclusion on the returns.

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