Accountants for Damp Proofing Companies

Damp proofing is inside the Construction Industry Scheme.

It is repair and alteration of a building, and there is no exclusion for it. If you take work from builders and main contractors you are a subcontractor under the scheme, and if you pay your own injection teams, plasterers or timber crews, you are also a contractor and you carry the verification and monthly return duties that go with that.

That part is settled. The part most firms in this trade get wrong is what happens after the job is finished.

The guarantee you gave in 2026 is still a liability in 2056

You complete a job, take the money, and hand over a 20 or 30 year guarantee with an insurance-backed policy behind it. The cash is in the bank this month. The obligation runs for another three decades.

Two separate things are going on there, and they are often confused. The guarantee is yours. The insurance-backed policy exists so the customer is covered if your company stops trading. While you are still trading, you are the one going back to the property, and the policy is not paying for it.

Most sets of accounts we see in this trade recognise the full invoice as revenue on completion and carry nothing at all for future callbacks. That overstates profit in the year you did the work and dumps the cost into whatever year the customer rings up. If you know roughly what proportion of jobs come back, and how much a return visit costs you, that is a measurable obligation and it belongs on the balance sheet.

It matters commercially as well as technically. Anyone buying your business, or lending against it, will look at thirty years of open guarantees and put their own number on it. Better that you have already put a defensible one there.

Domestic work and contract work are taxed differently

Working for a homeowner. The homeowner is the end user. The reverse charge cannot apply, so you charge VAT in the normal way and account for it yourself. Nothing unusual.

Working for a builder, developer or main contractor. Where they are VAT registered, registered under CIS and not the end user, the domestic reverse charge applies. You do not charge VAT, and you say so on the invoice.

Firms doing both need this handled by the customer record in the accounting software rather than by whoever is raising the invoice that afternoon. Applying the reverse charge to a private householder is a straightforward way to lose 20% of your revenue, because the customer will not be sending it back.

There is also a reduced rate that can apply to work forming part of a qualifying conversion, or a renovation of a dwelling that has been empty long enough to meet the conditions. It is worth checking on those jobs rather than defaulting to the standard rate.

Survey and report income

A damp survey with a written report is a different supply to the remedial work, and it may sit outside CIS altogether as professional work. Where the survey is billed separately, and particularly where the customer takes the report and has the work done by somebody else, it should not be lumped in with the contract income.

Firms that invoice one figure for “survey and treatment” leave a contractor to decide how much of it is labour, and contractors decide generously in their own favour.

What we do

CIS both ways. Registering you correctly, verifying your subcontractors, running deductions, filing by the 19th, and reclaiming what has been deducted from you.

Guarantee provisions. Working out what your callback history actually costs and getting it into the accounts properly, so your reported profit is real.

VAT set up by customer type, so domestic and contract work are treated correctly without anybody having to think about it.

Job costing that separates survey work, domestic remedial work and contract work, because the margins on those three are rarely what people expect.

Cash flow planning around deposits, stage payments and retention on contract jobs.

Everything else you would expect as well. Plus year end accounts, corporation tax, VAT returns, payroll and self assessment.

Who we work with

UK damp proofing, timber treatment and property preservation limited companies turning over between £500,000 and £5 million.

We work with firms across the UK. Everything is cloud based, so location makes no difference to how we work with you.

Common questions

Is damp proofing within CIS?
Yes. It is repair and alteration work on a building and falls inside the scheme.

Do I charge VAT to a homeowner?
Yes, at the applicable rate. A homeowner is an end user, so the reverse charge does not apply to that job.

Do I charge VAT to a builder?
Usually no. If they are VAT registered, CIS registered and not the end user, the reverse charge applies and they account for the VAT.

How should a 30 year guarantee be treated in the accounts?
As an ongoing obligation, measured on what returning to those jobs is likely to cost you. Recognising all the income and none of the future cost flatters the year the work was done.

Is a standalone damp survey inside CIS?
Where it is genuinely a survey and report, with no remedial work attached, it is likely outside. Invoice it separately so the position is clear.

Book a call. We will look at how your guarantees are treated in your last accounts and at whether the reverse charge is being applied to the right customers.

Book a call