Construction payroll is not one thing.
You have employed staff on PAYE and subcontractors paid under CIS. Then you have the people somewhere in the middle, treated as one thing while working like the other, because that is how it was set up years ago and nobody has looked at it since.
The two systems are separate and they answer different questions. CIS decides what comes off a payment to a subcontractor. It does not decide whether that person is genuinely self employed. A subcontractor being registered under the scheme, verified and deducted from correctly can still be an employee in substance, and that is a question about the working arrangement rather than about the scheme.
We run the payroll and we look at the second question before somebody else does.
Where construction payroll gets messy
Labour that moves between sites and statuses. Someone comes on the books for a big contract, goes back to invoicing when it finishes, then returns three months later. Starters and leavers pile up and the records fall behind.
Auto enrolment on a moving workforce. Pension duties follow the staff you employ, and a workforce that changes every few months is exactly the situation where assessments get missed and letters start arriving.
Holiday pay. It has to be worked out on the right basis for how the person is actually paid, and construction has plenty of people whose pay varies week to week. This is a common source of underpayment and of claims.
CIS payments run through the payroll by mistake. Or PAYE staff paid on invoice because it was easier at the time. Once the two get mixed, the CIS return and the PAYE return stop agreeing with each other and with the accounts.
The long standing subcontractor. The one who has been with you four years, works the hours you set, uses your van and your tools, and takes no financial risk of his own. He invoices you monthly and is registered under CIS. That registration settles nothing about his status.
What is included
- The PAYE payroll run each period, with payslips and reports to you before payment
- Real time submissions to HMRC and the figures you need for the monthly payment
- Auto enrolment assessed each period, with pension contributions handled and the ongoing duties kept up
- Starters and leavers processed properly, including staff who come and go across sites
- Holiday pay worked out on the correct basis for how each person is paid
- CIS and PAYE kept properly apart, with the two sets of figures reconciled so they agree with each other and with your accounts
- Employment status reviewed on the arrangements that look wrong, with a written view on each
- Dealing with HMRC on payroll queries and correspondence as your agent
How it works
- First call. We go through who is on the payroll, who is on CIS, who has moved between the two, and who nobody is quite sure about.
- We take over the payroll and check what has been running, including the auto enrolment position.
- We reconcile CIS against PAYE so you can see whether the two have been kept apart.
- We look at the arrangements that concern us and give you a written view on each one.
- Each period the payroll runs, you approve it, and the submissions go in.
- When someone’s working arrangement changes, we look at it then rather than at year end.
Who this is for
UK construction limited companies turning over between £500,000 and £5 million with a mixed workforce of employed staff and subcontractors, anywhere in the UK. It suits firms who have grown their direct labour and are no longer confident the split is right.
It is not for you if you want the payroll run and the status questions left alone. We will raise them, because the exposure is yours and it grows with every month the arrangement continues.
Common questions
Does registering someone for CIS make them self employed?
No. CIS governs the deduction from a payment. Employment status is decided by the working arrangement between you and them, and the two can point in different directions.
Who carries the cost if HMRC disagrees with how we have treated someone?
The contractor does, in practice. HMRC comes to the business that made the payments, and the amounts run back over the period the arrangement has been in place.
How do we know if a subcontractor is really self employed?
It turns on the substance of the arrangement, including control over how and when the work is done, who provides the equipment, whether the person can send somebody else in his place, and who carries the financial risk. There is no single test that settles it, which is why arrangements get looked at one at a time.
Can you run payroll and CIS together?
Yes, and it is the sensible way round. The reconciliation between the two is where errors surface.
We use an agency or an umbrella for some labour. Does that solve it?
Not by itself. It changes who employs the worker and it brings its own checks, so we look at the contracts rather than assume.
Book a call. Send us your payroll list and your CIS subcontractor list, and we will tell you on the call which arrangements we would look at first.
Common questions
Can you run CIS and PAYE together?
Yes, and most construction companies need both. Your employed staff go through payroll with tax and National Insurance deducted. Your subcontractors go through CIS with deductions at 20%, 30% or nothing at all. The two are separate systems and the risk is putting someone in the wrong one.
How do I know if a subbie should really be on payroll?
It turns on how the work is controlled rather than what the invoice says. If you set the hours, supply the tools and the person cannot send someone else in their place, HMRC is likely to treat them as employed whatever the paperwork calls them. We look at the arrangement and tell you where you stand before HMRC does.