CONSTRUCTION COMPANYACCOUNTSUK.
A construction limited company has to file annual statutory accounts with Companies House (within 9 months of year-end), and a corporation tax return (CT600) with HMRC (within 12 months of year-end, with corporation tax payable at 9 months and 1 day). The accounts have to follow either FRS 105 (micro-entity) or FRS 102 (small company), depending on size — and the choice affects what gets disclosed, what shareholders see, and what HMRC compares your CIS suffered figures against. We match you with construction accountants who handle both filings cleanly and don't fudge the framework choice.
WHAT GOES INTO CONSTRUCTION COMPANY ACCOUNTS
Statutory accounts for Companies House are the public-facing filing. Most construction limited companies fall under the micro-entity regime (FRS 105) — the size criteria are: turnover under £632,000, balance sheet total under £316,000, and average employees under 10. Meet two of three for two consecutive years and you can file as a micro-entity. The micro-entity accounts are the leanest format Companies House accepts: a balance sheet, a profit and loss account, and a single page of notes. Most subcontractor limited companies and small building firms file FRS 105.
Above the micro-entity thresholds (but below the medium-sized company thresholds: turnover ≤ £10.2m, balance sheet ≤ £5.1m, employees ≤ 50) you fall under FRS 102 small company regime — a more disclosed accounts format including a directors' report, more detailed notes, and the option of abridged accounts. Over the medium-sized thresholds, full FRS 102 with statutory audit unless the audit exemption applies (group circumstances, dormant companies, etc.). Construction firms growing through £600k-£700k of turnover often need a framework re-assessment we handle alongside the year-end work.
The CT600 corporation tax return is the HMRC-facing filing. Same year-end figures, but with tax adjustments: capital allowances on plant and equipment (Annual Investment Allowance up to £1m), R&D claims if applicable, depreciation added back and replaced with capital allowances, entertainment disallowed, mileage and motor expense reconciled. Construction-specific adjustments include the CIS suffered position (claimed via the EPS through PAYE first, then any residual through the CT600), and the reverse-charge VAT line which has to align with the company's VAT returns for the same period.
Companies House and HMRC deadlines are misaligned, which trips up firms that file at the deadline. Statutory accounts are due 9 months after year-end (so a 31 March year-end has accounts due 31 December). Corporation tax is payable 9 months and 1 day after year-end (1 January for a 31 March year-end). The CT600 itself is due 12 months after year-end (31 March of the following year for the same example). Pay the corporation tax before the CT600 is filed — provisional payment based on the draft figures — to avoid interest charges that accrue from the payment due date even if HMRC hasn't issued an assessment yet.
Companies House filing can be done by the director directly through the WebFiling service, but most construction companies file through their accountant's software because the corporation tax return is the parallel filing and the two have to reconcile. Late filing at Companies House triggers automatic penalties starting at £150 (under 1 month late) and escalating to £1,500 (over 6 months); double these for second consecutive year of lateness. HMRC corporation tax late filing penalties start at £100 and escalate similarly, with interest on unpaid corporation tax accruing from the payment due date.
CONSTRUCTION-SPECIFIC EDGE CASES
Long-term construction contracts can require a different revenue recognition approach. Under FRS 102, where a contract spans a year-end and the outcome can be reliably estimated, you recognise revenue and costs by reference to the stage of completion (the percentage-of-completion method). Most micro-entity construction companies don't cross that threshold — single project, single year, no work-in-progress — but firms doing larger refurbishment or multi-month builds do, and getting the WIP and revenue recognition right matters because it's what drives the corporation tax computation.
Retention is the construction-specific receivable that catches generalist accountants out. Money withheld by the client until the defects period ends (usually 5% retained for 6-12 months after practical completion) sits as a debtor on the balance sheet but isn't cash. A construction firm with £200k of retention can look profitable and cash-poor at the same time; the year-end accounts have to show retention separately so the bank reading the accounts understands the cash position.
Sub-contracted work classification on the P&L matters for CIS reconciliation. Payments to verified CIS subcontractors are sub-contractor costs (not employees, not materials), and the gross figure plus the CIS deducted should reconcile to your monthly CIS300 returns. A discrepancy between the P&L sub-contractor line and the year's CIS300 totals is exactly what HMRC compliance checks look for — the divergence is usually evidence that some payments were made off-CIS, which is what triggers the assessment.
Capital allowances on plant and equipment are bigger than most construction firms claim. Vans (commercial vehicles, 100% AIA in year of purchase up to the AIA limit), plant (excavators, dumpers, scaffolding systems), tools, IT and software all qualify. Cars (private-use vehicles) are more restricted — main-pool 18% writing down allowance for low-emissions or special-rate 6% for higher emissions, with personal-use disallowance for any director-only use. Confusing the two costs construction firms thousands.
R&D tax credits are claimable for construction firms doing genuinely innovative work — bespoke fabrication, novel structural solutions, sustainability prototyping. The bar is "advance in science or technology" which is high; most run-of-the-mill construction work doesn't qualify. Where it does, the SME R&D credit (effectively a 130% additional deduction or a tax credit cash-back option) is significant — but the claim has to be evidenced properly with project-by-project narratives and cost allocation, and the regime tightened materially from 1 April 2023 (lower additional deduction, lower payable credit rate). Worth a conversation if you're developing genuine novelty; not worth claiming on standard build work.
Dormant companies and related-party considerations matter where directors hold multiple construction-related companies. A dormant company is exempt from full accounts and audit but still has to file an annual confirmation statement and dormant accounts at Companies House. Stop trading without dormancy registration and you keep filing full-cost accounts unnecessarily; treat a trading company as dormant and you trigger penalties. Construction directors who set up SPVs for individual project finance need this handled cleanly.
CONSTRUCTION COMPANY ACCOUNTS IN PRACTICE
Sole-director limited company, second year of trading, turnover £148k, all CIS subcontractor work. Filed FRS 105 micro-entity accounts at Companies House, CT600 to HMRC. Capital allowances: £4,200 (van AIA, tools). CIS suffered £29,600 against PAYE/NIC of £4,800 — claimed via EPS first (settling PAYE), residual £24,800 carried into the CT600 against corporation tax of £18,200. Net refund £6,600. Total fee for the year: ~£950.
Three-year-old building firm, current year turnover £680k (over the £632k FRS 105 turnover threshold), balance sheet £290k, 8 employees. Crossed the FRS 105 turnover threshold for the first time. Re-assessed eligibility, confirmed they'd still qualify next year on balance sheet and employees but the consecutive-year rule meant FRS 102 small company filing this year. Switched accounting framework, prepared FRS 102 accounts with retention split out separately, filed the CT600 with full capital allowance schedule. Audit exemption maintained.
Refurbishment Ltd with three completed contracts in the year, two contracts mid-stream at year-end. Significant retention balance (£87k) and WIP (£142k) needed proper segregation on the balance sheet and recognition through the P&L. Generalist predecessor had been treating retention as cash and had been declaring revenue as raised on certified valuations rather than on stage of completion. Corrected retroactively for two prior years, restated comparatives, filed amended CT600 for one prior year. Recovered ~£11k corporation tax overpaid in a year where retention was incorrectly recognised as profit.
CITIES WE COVER
Construction company structure differs by city — turnover bands, group structures, and the kind of work being done all shift the framework choice and the corporation tax position:
Construction Company Accounts:Common Questions
Statutory accounts at Companies House: 9 months after year-end. Corporation tax payment to HMRC: 9 months and 1 day after year-end. CT600 corporation tax return: 12 months after year-end. Most construction firms file the CT600 alongside the statutory accounts (so 9 months after year-end), pay the corporation tax at the same time, and use the remaining 3 months as buffer. Late at Companies House triggers £150-£1,500 automatic penalties; late at HMRC adds further penalties plus interest from the payment due date.
If you meet two of three criteria (turnover < £632k, balance sheet < £316k, employees < 10) for two consecutive years, you qualify for FRS 105 micro-entity status. Most subcontractor limited companies and small builders file as micro-entities — the format is leaner, less is publicly disclosed, and the accountancy fee is lower. Above the threshold you move to FRS 102 small company regime with abridged or full accounts options.
Yes. Commercial vehicles (vans, light commercial, dumpers) qualify for 100% Annual Investment Allowance up to the AIA limit (£1m for the relevant tax years). Cars are different — main-pool 18% writing-down allowance for low-emission, special-rate 6% for higher emission, with personal-use restriction if the director uses it privately. Construction directors mistakenly capital-allowance their personal car at 100% AIA all the time and end up with the disallowance on review.
CIS deducted from your company's payments shows up as a debtor on the balance sheet (HMRC owe it back) and gets cleared either through the EPS against PAYE liabilities monthly, or through the CT600 against corporation tax at year-end, or as a refund. The P&L shows turnover gross (before CIS deduction) — the deduction itself is a tax reconciliation, not an expense. Generalist accountants who treat CIS suffered as a P&L expense get the corporation tax computation wrong.
Abridged accounts (FRS 102 small company regime) drop the detailed notes that full accounts include — directors' remuneration breakdown, related-party disclosures in detail, debtor/creditor age analysis. They're still publicly filed and the headline figures are identical. Most construction limited companies above the micro-entity threshold but below medium-sized file abridged accounts because there's no commercial benefit to disclosing the detail to competitors via Companies House. Above the medium-sized thresholds, abridged is no longer available.
Yes if you meet the small company criteria (turnover ≤ £10.2m, balance sheet ≤ £5.1m, employees ≤ 50 — meet two of three). Group situations complicate this: if the company is a subsidiary in a group that, taken together, exceeds the small company thresholds, the subsidiary loses audit exemption regardless of its own size. Construction holding-company-and-trading-subsidiary structures need this checked when the group consolidates over the threshold.
Retention is money the client withholds from your invoices (usually 5%) until the defects period ends 6-12 months after practical completion. It's a receivable: you've done the work and earned the revenue, but the cash hasn't arrived. On the balance sheet retention should be shown as a debtor (separately from trade debtors so the cash position is clear); on the P&L the underlying revenue is recognised at the time of certification, not at the time of cash receipt. Generalist accountants who don't handle construction often treat retention as cash and overstate the company's liquidity.
You can file directly via Companies House WebFiling (statutory accounts) and HMRC's CT online (CT600). The risk is the corporation tax computation: capital allowances, depreciation add-backs, CIS suffered through EPS/CT600, and reverse-charge VAT reconciliation are technical and the software won't catch errors. The cost saving from DIY filing is usually less than the corporation tax saved by claiming things correctly — even more so when CIS is involved. We see the most expensive corrections on companies that filed their first 2-3 years themselves.