End of the tax month
You use four self-employed painters as well as your own staff. Their days are in a WhatsApp group. Their invoices come as photos, PDFs and one handwritten sheet. Each has a different CIS deduction status, which you verified at some point. At the end of the tax month, the bookkeeper works out who did what, checks invoices, calculates deductions, pays them, sends statements and prepares the monthly return.
One painter's invoice includes a day he spent on a job that was cancelled. Another's materials are included without receipts.
Why subcontract pay is hard to get right
Subcontract painters often move between jobs and firms, keep their own records, and invoice in their own format. CIS adds rules about verification, deduction and statements that must be applied correctly each month.
- Days are recorded by text, not against jobs.
- Invoices arrive in different formats and are checked by hand.
- Labour and materials are not separated on invoices.
- Deduction status for each subcontractor is kept in a spreadsheet.
- Statements and returns are produced manually.
CIS rules, verification and your obligations are matters for HMRC guidance and your accountant. We do not advise on them. The system applies the statuses and rules you and your accountant confirm.
What the mess costs
Overpaying for days that did not happen. Arguments over days that did. Errors in deductions or statements that take time to correct. The bookkeeper's time each month. And no clear view of labour cost per job when subcontract painters are involved.
Painters on day rates also notice. When their days are logged against jobs and confirmed weekly, they get paid correctly and on time, without having to argue. Good subcontract painters have choices about who they work for, and being easy to be paid by is part of keeping them.
The bookkeeper's view matters here as well. When invoices, days and deductions all have to be pieced together at the end of the tax month, mistakes are likely and corrections are fiddly. When the pieces are recorded as the month goes along, month end becomes a check rather than a reconstruction.
The system we build
- Subcontract painters log their days against jobs on their phones, or the supervisor logs them. Days are confirmed weekly.
- Their invoices are uploaded or emailed in, read automatically, and compared with confirmed days and agreed rates. Materials are split out, with receipts requested.
- Each subcontractor's verification details and deduction rate, as confirmed with your accountant, are held on their record with the date.
- The system calculates the deduction on the labour element using the rate recorded, and produces a payment statement for each subcontractor.
- Figures for the monthly return are prepared for your accountant or payroll software, where an import is available.
- Labour cost from subcontractors is added to each job's costing.
| Item | Source |
|---|---|
| Days worked | Logged against jobs, confirmed weekly |
| Invoice | Read and checked against days and rates |
| Materials | Split out, receipts attached |
| Deduction rate | Record confirmed with your accountant |
| Statement | Produced per payment |
Month end with fewer arguments
Invoices match confirmed days, so disputes are rare and specific. Statements go out correctly. Your accountant gets clean figures for the return. And the labour cost of every job includes the subcontract painters, not just your staff.
Is subcontract pay a monthly headache?
- Subcontract days are tracked by text.
- Invoices arrive in every format.
- You have paid for days that were not worked.
- Statements and returns take hours each month.
- Subcontract labour is not in your job costs.