It’s estimated that the UK construction industry contributes more than £110 billion to the economy each year, and it’s been growing every year since 2013.
According to the latest statistics from the ONS, there were 325,736 construction firms in the UK in 2018, and 31,206 of those firms were based here in the South West.
It’s an industry with plenty of opportunities, but it’s also a volatile one, often impacted by shifts in consumer confidence, audit failures and the wider economy.
That pace of change can be difficult to manage, especially when you’re trying to keep your business running smoothly. But a combination of expert advice and reliable accounting software can make it easier.
With features specially designed for the construction industry, and various time-saving tools for small businesses, Xero is the ideal software to help you run your construction firm.
Xero and the Construction Industry Scheme
If you run a construction business, you’ll be familiar with the CIS – and with how complicated it can be.
The scheme sets out rules for paying contractors and subcontractors when they carry out construction work.
Under the CIS, contractors must verify the employment status of any subcontractors, calculate tax deductions every time they’re paid, file monthly CIS returns to HMRC, and send written statements to subcontractors to confirm the amount that has been deducted.
Fortunately, you don’t have to figure it all out yourself. Earlier this year, Xero launched new features for CIS contractors, which could save hours of your time. These include:
- Calculating deductions and payments
Xero will automatically calculate the right amount to deduct from subcontractors’ payments. This should save you time and reduce the risk of incorrect payments.
- Managing your accounts
You can import all your contractor and subcontractor accounts into Xero, then tick the box to mark them for CIS.
- Sending payment and deduction statements
Xero makes it easy to generate payment and deduction statements, and send them out to subcontractors so they have the information they need.
- Filing returns directly to HMRC
With the CIS add-on, you can create your monthly returns and file them directly from Xero to HMRC. Eventually, you’ll also be able to verify your subcontractors online.
Other Xero features
The benefits of Xero don’t stop there – its other business features can be a huge help to anyone running a construction firm.
Its real-time dashboards mean you can keep on top of your cashflow. Plus, it allows for quick and easy invoicing to help clients pay you on time.
Get in touch
As Xero-certified trade and construction specialists, we understand the challenges faced by construction businesses. We’re ready to help you navigate them.