The hard part of a construction year end is everything that was half finished on the date.
Most sectors close their books on a position that is reasonably clear. You do not. On your year end date there are jobs part built, money held back that you have earned but cannot yet ask for, applications submitted that nobody has certified, and materials stacked on site that were paid for and never used. Behind all of it is a year of CIS taken off you that has to be matched to what HMRC thinks it took.
Get any of it wrong and the accounts describe a year you did not have. A profitable year looks flat because the work in progress was never brought in. A quiet year looks strong because an application was treated as certified income. The bank reads them, HMRC reads them, and the tax is worked out from them.
Where construction year ends go wrong
Work in progress ignored. Cost has gone into a job that has not been invoiced. Leave it out and the profit lands in the wrong year, and the job looks like it lost money before it earned any.
Retention treated as gone. Money held back on a completed job is still owed to you. Firms write it off in their heads, then never chase it, then never see it. It belongs in the accounts, separately from the rest of your debtors, so you can see how much of your profit is being held by other people.
Applications booked as certified. An application for payment is what you asked for. A certificate is what the customer agreed to. Booking the first as income overstates the year and leaves you arguing about it later.
Materials on site counted as cost. Bought, delivered, not yet fixed. Treated as a cost of the year, they drag the profit down for work that has not happened yet.
CIS suffered never reconciled. Deductions taken off your invoices through the year have to agree with what HMRC has recorded against you. Where the two do not match, the difference sits there until somebody works out which side is wrong, and it is usually a missing statement from a contractor.
Director’s loan account left to drift. Money drawn through the year that was never classified sits in one balance, and the year end is when it becomes a question with a tax consequence attached.
What is included
- Statutory accounts prepared and filed at Companies House
- Corporation tax return prepared and submitted to HMRC
- Work in progress reviewed job by job against the position on site, rather than one figure at the bottom
- Retention identified and shown separately, both what is held from you and what you hold from your subcontractors
- Applications and certificates reconciled, so income sits in the year it belongs to
- CIS suffered reconciled against your HMRC record, then set off or reclaimed
- Director’s loan account reviewed and cleared up before it becomes a problem
- Depreciation and capital allowances reviewed on plant and vehicles
- A review meeting once the accounts are done, covering what the numbers say about the business
How it works
- First call. We look at last year’s accounts, how jobs are recorded now, and what state the bookkeeping is in.
- We send a list of what we need. Job records, retention held, applications outstanding, and your CIS statements.
- We prepare a draft and come back to you on anything that does not look right. That conversation usually happens over the jobs.
- We reconcile CIS suffered to HMRC and deal with the gaps where a contractor never sent a statement.
- You approve the accounts. We file at Companies House and submit the corporation tax return.
- We go through them with you. What the margin did, which jobs carried the year, what is tied up in retention, and what the tax position means for the year you are already in.
Who this is for
UK construction limited companies turning over between £500,000 and £5 million, working anywhere in the UK. Contractors and subcontractors, including firms that are both depending on the job.
It is not for you if you want accounts filed quietly with no questions asked. We ask about the jobs, because that is where the accuracy comes from, and it takes some of your time. It is also not for you if the records exist only as a bank statement and a carrier bag of invoices, unless you want the bookkeeping sorted out as well, which we can do.
Common questions
How far back do you need our records?
The full year, plus the closing position from the year before so we can pick up where the last accounts left off.
We are behind. Can you still take it on?
Yes, and late is better dealt with than left. Tell us how late on the first call.
Do you handle the CIS reclaim as part of this?
Yes. We reconcile what was deducted from you against your HMRC record and set it off or reclaim it as part of the year end.
Our last accountant handed over accounts and nothing else. Is the meeting really included?
Yes. Accounts you cannot read are a filing exercise. The meeting is where you find out what the year did.
Can you do the year end if someone else does our bookkeeping?
Yes, as long as we can get at the records. Where the bookkeeping is causing the problems, we will say so.
Book a call. Send over your last filed accounts beforehand and we will tell you on the call how work in progress and retention have been treated, and whether we would have done it the same way.
Common questions
When do my accounts and Corporation Tax return need filing?
Accounts go to Companies House within nine months of your year end. The Corporation Tax return goes to HMRC within twelve months, but the tax itself is payable at nine months and one day. That gap catches people out, because the money is due before the return that calculates it.
Do you reconcile the CIS suffered figure?
Yes, and it is the part most generalist accountants get wrong. Deductions taken off your invoices through the year have to agree to the statements you were issued and to what HMRC holds. When they do not agree, the difference sits unclaimed. We reconcile it as part of the year end rather than leaving it.