Accountants for tradespeople in Watford and nearby towns
Most of the trades we work with are out on site by half seven and doing paperwork at the kitchen table at night. A loft in Garston, a rewire in Bushey, a bathroom in Rickmansworth, then a week on a bigger job for a main contractor. Each job brings its own receipts, its own payment terms and sometimes its own tax deduction, and it all has to come together at the end of the year.
There is plenty of building work around Watford right now. The Watford Riverwell scheme south of the town centre, run by Watford Borough Council with Kier Property, has already delivered hundreds of new homes and more phases are planned. With the M1 and the M25 close by, many local trades also take jobs across Hertfordshire and into north west London.
Good accountants for tradespeople in Watford should understand that rhythm. You need someone who knows what a CIS statement looks like, why a van is not just another expense, and why cash flow matters more to you than a neat set of accounts.
Getting your CIS deductions back
If you work for builders or contractors as a subcontractor, you will usually be paid under the Construction Industry Scheme, known as CIS. The contractor takes 20% off the labour part of your invoice if you are registered, or 30% if you are not, and pays it to HMRC on your behalf. A small number of established businesses qualify for gross payment status, which means nothing is taken off at all.
That 20% is not your final tax bill. It is money paid towards it. For a sole trader, the deductions are set against your income tax and National Insurance on your self assessment return, and many subcontractors get a refund once their materials, van costs and other expenses are taken into account. If you run a limited company, the deductions can be set against the PAYE your company owes each month, and any amount left over is reclaimed after the tax year ends.
The refund only works if the figures match. We check every payment and deduction statement against what you were actually paid, chase contractors for missing ones, and make sure the deductions are only on labour and not on the materials you bought.
What is included
- Self assessment tax returns for sole trader trades
- Checking CIS statements and claiming refunds
- Company accounts and corporation tax for incorporated trades
- Monthly CIS returns if you take on subcontractors
- VAT registration, returns and reverse charge invoices
- Quarterly Making Tax Digital updates from your phone app
- Van, tool and equipment claims
- Payroll if you take on an apprentice or labourer
Vans, tools and what you can claim
Your van is often the biggest cost in the business after materials. As a sole trader you can claim it in one of two ways. You can claim the actual running costs, plus capital allowances on the cost of the van itself, or you can use HMRC's simplified mileage rates instead. Once you pick a method for a vehicle, you generally stick with it, so it is worth getting this right in your first year.
Tools and equipment are claimed through capital allowances, which is HMRC's way of giving tax relief on things you buy to use in the business over several years. Uniforms and protective clothing, phone costs and business insurance can also count. If you trade through a limited company and use a company van, a van benefit charge can arise if your private use of it is more than insignificant, so we will ask how you actually use it.
Keep every receipt, even the small ones from the builders merchant. HMRC expects self employed people to keep records for at least 5 years after the 31/1 filing deadline for that year.
VAT and the reverse charge
You must register for VAT once your taxable turnover goes over £90,000 in any rolling 12 month period. That is turnover, not profit, so a busy plumber or electrician with a lot of materials going through the books can reach it sooner than expected. We keep an eye on your rolling total so it does not catch you out.
If you are VAT registered and do work for another VAT registered builder under CIS, the domestic reverse charge usually applies. Instead of charging VAT on your invoice, you note that the customer accounts for it. It does not apply to work for homeowners, or where the customer has told you in writing that they are the end user. Getting this wrong on an invoice is one of the most common mistakes we see, and it is easy to fix once you know the rules.
Making Tax Digital is now here for some trades
From 6/4/2026, sole traders and landlords whose qualifying income is above £50,000 have had to use Making Tax Digital for Income Tax. The limit then falls, first to £30,000 on 6/4/2027 and then to £20,000 on 6/4/2028. Qualifying income means your turnover before expenses, so a tradesperson with modest profits can still be brought in.
Under the new system you keep digital records and send short quarterly updates to HMRC through approved software, then file a tax return at the end of the year. As accountants for tradespeople in Watford, we can set you up with an app that lets you snap receipts on your phone in the van, so the quarterly updates take minutes rather than a weekend.
Staying a sole trader or forming a company
Most trades start as sole traders because it is simple. As profits grow, a limited company can sometimes make sense, especially if you take on staff, win bigger commercial contracts or want to keep some profit in the business. It also brings extra filing, a separate bank account and stricter rules on taking money out.
There is no single answer. When people ask us, as accountants for tradespeople, which is better, we would rather show you the numbers both ways than push you into a structure. We look at your expected profit, how you want to pay yourself, and the contractors you work for, then talk it through in plain words.
Who this suits
- Subcontractors paid under CIS who want their refund each year
- Electricians, plumbers and heating engineers working for homeowners
- Builders and roofers who hire their own subcontractors
- Decorators, carpenters and plasterers starting out on their own
- Trades thinking about moving from sole trader to a limited company
Common questions
Why do I get a tax refund as a CIS subcontractor?
The contractor takes 20% off your labour before you are paid, but that ignores your expenses and personal allowance. When your self assessment return is worked out properly, your real tax bill is often lower than what was deducted. The difference comes back to you as a refund.
Can I use an accountant in Watford if I mostly work in London?
Yes. Where you work makes no difference to your tax return, and you can send paperwork by email or through an app. Plenty of trades based in Watford, Bushey and Hemel Hempstead spend part of the week on sites in north west London.
Do I charge VAT to homeowners?
If you are VAT registered, yes. The domestic reverse charge does not apply to work done for homeowners, so you charge VAT in the normal way. It mainly applies when you invoice another VAT registered builder under CIS.
What happens if I lose my CIS statements?
Contractors must give you a statement for each month they pay you, so you can ask them for a copy. We can also compare your bank statements and invoices with the deductions HMRC holds for you. It takes longer, but missing statements rarely mean a lost refund.
Do I have to register for Making Tax Digital as a builder?
It depends on your turnover before expenses. From 6/4/2026 it applies if your qualifying income is over £50,000, and the limit falls to £30,000 from 6/4/2027. We can check where you stand from your last tax return.
Is it worth claiming mileage instead of van costs?
Sometimes. Simplified mileage is easier, but a newer or more expensive van can give a bigger claim through actual costs and capital allowances. We run both before you choose, because switching later is not always allowed.
I take on a labourer now and then. Do I need to tell HMRC?
If they are an employee, you need to register as an employer and run payroll before the first payday. If they are a self employed subcontractor on construction work, you may need to register as a CIS contractor and verify them with HMRC. We can help you work out which applies.