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United Kingdom

Getting paid on UK construction

Between finishing the work and seeing the money there is CIS, VAT, retention and somebody else’s payment cycle. These guides cover what actually lands from a given invoice, what comes back to you and when, and the registrations that decide how big the gap is.

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13 guides on this

How to run the businessLate Payment InterestStatutory interest at 8% over base and the £40, £70 or £100 fixed sum apply to every late business invoice by force of the Late Payment of Commercial Debts (Interest) Act 1998, whether or not your contract says so. This is the rate, the day the clock starts, the arithmetic on a real £14,800 subcontract valuation, the line to paste onto your invoices, and what the letter before claim, Money Claim Online and the winding-up route each cost.After you qualifyRegister for CISAn unregistered subcontractor has 30% taken off their labour instead of 20%, and the difference sits with HMRC until the tax return is filed. This is the registration that stops it, the UTR you need first, and how to keep a contractor's verification from putting you back on 30% anyway.After you qualifyRegistering for VATWork out the exact month your rolling twelve month turnover tips over £90,000, what to invoice while you wait for the number, and why the reverse charge usually ends the Flat Rate Scheme case for a construction business.How to run the businessBecome a CIS contractorThe first time you pay someone else for construction work you become a CIS contractor. Register before that payment, verify through HMRC, work the deduction off labour only, issue the statement within 14 days and file the CIS300 by the 19th, including the nil return that came back on 6 April 2026.How to run the businessStart an AdjudicationThe statutory right to refer a construction dispute at any time and get a binding decision in 28 days: crystallising the dispute, the notice of adjudication, the nominating bodies and their fees, the referral, the capped low value route, and enforcement in the TCC.How to run the businessSuspending for Non-PaymentSection 112 of the Construction Act lets an unpaid subcontractor stop work on seven days' notice, charge the payer for demobilising and remobilising, and take the lost programme time back. This is the notice, the preconditions in order, and the arithmetic counted from a real date.How to run the businessWhen a Homeowner Will Not PayA domestic job that goes wrong is the most common non-payment situation a small UK builder faces, and section 106 of the Construction Act specifically excludes them from the statute every article is about. This is what the exclusion takes away, what the Consumer Rights Act 2015 and the Consumer Contracts Regulations 2013 hand you instead, how to build a stage payment ladder that leaves you one stage exposed, and the four recovery routes with their real fees.How to run the businessCIS gross payment statusGross payment status means the main contractor pays your invoice in full instead of holding 20% of the labour. This is the business, turnover and compliance tests with the paragraph of Schedule 11 beside each one, the arithmetic on £180,000 of labour a year, and the 90 days and 30 days that decide what happens if HMRC moves to cancel.How to run the businessVAT reverse chargeThe exact wording HMRC accepts on a reverse charge invoice, the six conditions that switch it on, why CIS takes materials out of the deduction while the reverse charge keeps them in, and how to pull your input VAT back a month faster.How to run the businessCost of going self-employedAn itemised 2026 setup bill in pounds, from the £36 CSCS card to the van, plus the month by month cash flow that shows why you need about £10,000 behind you before the first application gets paid.How to run the businessWhat an hour costs youTake a £280 day rate apart: 185 billable days, £15,220 of van, tools and pension, and £30,337 landing at £14.45 an hour. Then see what a priced job does to the same year.How to run the businessWhich contract to signPick a named contract for the job in front of you, priced: JCT Home Owner at £40, Minor Works 2024 at £100, Intermediate at £178, or your own written terms. Includes the five clauses that decide whether you get paid, and the 14 day cancellation right that can turn a finished job into an invoice you cannot send.How to run the businessNo Lien, Four Routes InsteadEngland, Wales, Scotland and Northern Ireland have no construction lien, no mechanics' lien and no holdback trust. This is the four routes that do work, ranked by how fast the money moves: suspension on seven days' notice under section 112, adjudication decided in 28 days under section 108, statutory interest and the fixed sum under the Late Payment of Commercial Debts (Interest) Act 1998, and the court routes with their real fees. Plus the three near-lien devices that exist in English law, a counted date sequence from 31 May 2026, and a decision table matching debt size, age and payer solvency to a route.

Count it instead of estimating it

CIS deduction calculatorLabour and materials in. The deduction at 20%, 30% and 0%, with materials and plant hire stripped out of the base first.Free, no signup.VAT reverse charge calculatorSix conditions decide whether you charge VAT at all. Answer them and the page builds the invoice, CIS deduction and all.Free, no signup.
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The rest of the United Kingdom library

The Construction Industry SchemeVAT for UK constructionPricing construction work in the UKStarting a construction business in the UKConstruction bookkeeping in the UKCSCS cards and site ticketsFinding construction work in the UKPayment notices and adjudication
Every guideThe whole United Kingdom libraryHow to run the business