Window and door installation is inside the Construction Industry Scheme. Replacing windows and doors in an existing building is alteration and repair of that building, which puts it squarely within the definition of construction operations.
That part is settled. The thing that does more damage to a window firm’s accounts is not CIS at all. It is deposits.
Your deposits are not your turnover
A domestic window company can take 25% up front in October for a job that gets surveyed in November and fitted in January. That money is in the bank for three months before you have laid a hand on the building.
If it goes through as income on the day it lands, October looks like a strong month and January looks like a poor one. Neither is true. And at a year end, a company sitting on £120,000 of deposits for work it has not started can show a profit it has not earned and pay corporation tax on it early, at exactly the point in the winter when cash is tightest.
The correct treatment is deferred income. The deposit sits on the balance sheet as a liability until you have done the work it relates to, and only then does it move into revenue. It is a straightforward adjustment once the system is set up to do it, and it changes what your management accounts are telling you.
There is a separate VAT question sitting alongside it. Receiving a payment on account normally creates a tax point, so the VAT can fall due in a different quarter from the one the income belongs to. Those two things are not the same and firms routinely conflate them.
The practical effect of getting this right is that you can see how much of the cash in your account is actually yours. For a business that funds its material purchasing out of customer money, that is the number that matters most.
Certification, materials and callbacks
FENSA or Certass. Self-certifying replacement windows and doors against Building Regulations means paying to belong to a competent person scheme, plus assessment visits, per-installation notification fees and the insurance-backed guarantee behind them. These are allowable business costs. They are also a fixed cost per installation, which means they belong in your job costing rather than sitting in overheads where they quietly reduce the margin on every small job you take.
Glass and frames bought to order. Made-to-measure units against a specific customer, worthless to anyone else if that customer cancels or the survey was wrong. A resurvey error writes off the full material value on that job. Coding purchase orders to the job from the moment they are raised is the only way to see how often it happens and what it costs you in a year.
Remedial and warranty callbacks. The handle that fails, the seal that blows, the door that has dropped, the trim that was never right. Nobody invoices for it and everybody does it. Two fitters and a van for a day is real money leaving the business, and because it is never posted against the original job, the contract still shows the margin you quoted. Track callbacks by job and you usually find the same product line or the same surveyor behind a disproportionate share of them.
VAT on domestic work
Your homeowner customers are end users. They are not VAT registered and they are not passing the work on, so the domestic reverse charge does not apply and you charge VAT in the ordinary way.
Work taken from a housing association or a main contractor is a different position, and the reverse charge may apply there. Firms running mostly retail work with the occasional contract job are the ones most likely to invoice a trade customer on the domestic template without thinking about it.
What we do
Deposits and payments on account posted as deferred income, so your monthly figures show what you have earned rather than what has cleared.
CIS handled properly, including deductions taken by contractors on your commercial work.
VAT applied correctly across domestic and trade customers.
Job costing that carries certification fees, material write-offs, resurvey costs and callback labour against the contracts they belong to.
Accounts, corporation tax, VAT returns, payroll and self assessment running alongside it.
Who we work with
UK window, door, glazing and conservatory installation limited companies turning over between £500,000 and £5 million, anywhere in the country.
Common questions
Is window and door installation inside CIS?
Yes. Replacing or repairing windows and doors in a building is alteration and repair, which is a construction operation.
How should deposits be treated in my accounts?
As deferred income. They stay on the balance sheet until the work is done, then move into revenue.
Do I pay VAT on a deposit before the job is fitted?
Usually yes. A payment on account normally creates a tax point when you receive it, which is separate from when it counts as income.
Does the VAT reverse charge apply to my domestic customers?
No. Homeowners are end users, so you charge VAT as normal. Trade customers are a different question.
Are FENSA and Certass fees deductible?
Yes, they are allowable business costs. They are also worth costing per installation rather than treating as general overhead.
Book a call. Tell us what you are holding in customer deposits right now and we will show you what your accounts should be reporting as profit.
Common questions
Does CIS apply to window and door installers?
Window and door installation is inside the Construction Industry Scheme. Replacing windows and doors in an existing building is alteration and repair of that building, which puts it squarely within the definition of construction operations. That part is settled. The thing that does more damage to a window firm’s accounts is not CIS at all. It is deposits.
Does the VAT domestic reverse charge apply to window and door installers?
Usually yes. The domestic reverse charge follows CIS scope. Where you supply window and door installers work that falls inside CIS to a customer who is VAT registered, registered under CIS and is not an end user, you do not charge VAT on the invoice. Your customer accounts for it instead. Supplies to homeowners and to end users stay outside it, and you charge VAT the normal way.