Why UK Construction Firms Struggle with Payroll – And How to Fix It
Running a construction business in the UK is no small feat. Between managing projects, securing contracts, and keeping staff safe on-site, there’s little time left to worry about payroll. Yet, it's one of the most important and complex parts of the business – especially when you’re dealing with subcontractors, fluctuating staff numbers, and the ever-confusing Construction Industry Scheme (CIS).
If payroll is eating up your time and stressing you out, you’re not alone. Here’s why construction firms often struggle with payroll – and how outsourcing it can free up your time, reduce errors, and keep HMRC off your back.
1. CIS Deductions Are a Compliance Minefield
The Construction Industry Scheme (CIS) requires contractors to deduct money from a subcontractor’s payments and pass it to HMRC. Sounds simple, right? In reality, it’s anything but.
Many construction firms:
- Struggle to correctly register subcontractors as gross or standard.
- Forget to verify CIS status, risking penalties.
- Make errors in calculating or reporting deductions on time.
How we help: We take care of verifying subcontractors, calculating CIS deductions accurately, and submitting your monthly CIS returns to HMRC so you don’t have to.
2. You’re Dealing with a Mixed Workforce
Unlike many industries, construction businesses often employ a blend of:
- Full-time staff
- Part-time labourers
- Freelancers
- CIS-registered subcontractors
Each group comes with its own rules for pay, taxes, and reporting. Managing this manually is not only time-consuming – it's risky.
How we help: Our payroll system handles mixed workforces with ease. Whether it’s PAYE employees or CIS subcontractors, we ensure everyone gets paid correctly and that you're fully compliant.
3. Late or Incorrect Filings Can Be Costly
Construction businesses are frequently penalised for:
- Missing HMRC Real-Time Information (RTI) submissions
- Inaccurate end-of-year reporting
- Forgetting to issue payslips or P60s
These mistakes can result in hefty fines and investigations that damage your business's reputation.
How we help: We handle all filings on your behalf, keeping you compliant and penalty-free. You’ll never miss another deadline, and your records will always be accurate.
4. Payroll Is Stealing Your Time
When you’re on-site managing contractors, sorting materials, or dealing with clients, the last thing you need is to be stuck in the office fiddling with spreadsheets or payroll software.
How we help: We take payroll completely off your hands. You simply send us your hours or pay data each period – we do the rest, from calculations to payslip distribution and pension submissions.
5. Auto-Enrolment Isn’t Optional
Even if you have only a few employees, you're legally required to auto-enrol them into a workplace pension and manage ongoing contributions. This adds yet another layer of compliance to worry about.
How we help: We manage auto-enrolment and pension contributions as part of our service. You stay compliant without lifting a finger.
Why Construction Firms Choose to Outsource Payroll
- Time saved on admin
- Fewer errors and reduced risk of HMRC penalties
- Stress-free CIS management
- Professional support from payroll experts who understand your industry
Ready to Get Payroll Off Your Plate?
We offer construction firms reliable, fully-managed payroll from just £4.20 per employee per pay run. Whether you have a small team or dozens of subcontractors, we’ll make payroll simple, accurate, and compliant.
Book a free consultation today and let’s take the stress out of payroll – so you can get back to building.
📧 Email us: Contact@personalpayroll.co.uk
📞 Call us: 01276 58 30 58
📅 Book a free consultation: Click Here