Client Name: Khan Build Ltd (anonymised)
Industry: Construction & Civil Engineering
Business Type: Owner-Managed Limited Company (15 employees)
Annual Turnover: £1.2 Million
Service Used: Making Tax Digital | Payroll | Corporate Tax Returns | Company Secretarial
Background
Khan Build Ltd is a family-run construction business operating across the North West of England, specialising in commercial fit-outs and residential extensions. The company had grown rapidly over three years, from four employees to fifteen, but its back-office processes had not kept pace with its expansion. Records were maintained on paper ledgers and spreadsheets, payroll was processed manually each month, and VAT returns were filed based on estimates rather than live data.
HMRC’s Making Tax Digital (MTD) for VAT mandate had applied to the business for two years, yet the company remained non-compliant, relying on a manual workaround that its part-time bookkeeper had devised. When HMRC issued a compliance notice and the business owner, Khalid, received notification that his VAT account was under review, he contacted Legend Fusions for urgent support.
The Challenge
- Non-compliance with MTD for VAT: VAT returns were not being submitted via MTD-compatible software, creating immediate regulatory risk.
- Manual payroll errors: two employees had been paid incorrectly for six months, creating PAYE liabilities and staff relations concerns.
- CIS (Construction Industry Scheme) mismanagement: subcontractor deductions had not been reported correctly to HMRC, resulting in a potential CIS underpayment.
- Disorganised financial records: year-end accounts took over three months to prepare, delaying corporate tax filings and incurring HMRC late filing penalties.
- No formal company secretarial processes: confirmation statements were overdue and director service addresses required updating at Companies House.
Our Solution
Legend Fusions deployed a structured four-phase digital transformation and compliance programme:
- Phase 1: MTD Implementation: We migrated the business onto HMRC-recognised cloud accounting software, connected it to their HMRC digital account, and configured automated VAT return submissions. All historical VAT periods were reviewed and a voluntary disclosure filed to address the compliance gap.
- Phase 2: Payroll Correction & Automation: We conducted a payroll audit, identified the six months of errors, and recalculated correct PAYE and National Insurance liabilities. Corrected RTI submissions were filed with HMRC and affected employees received updated payslips with explanatory letters.
- Phase 3: CIS Compliance: We reviewed 18 months of subcontractor payments, reconciled deductions, and submitted amended CIS monthly returns to HMRC. A clear internal process was established for onboarding new subcontractors with correct verification checks.
- Phase 4: Year-End & Company Secretarial: We prepared two years of overdue management accounts and corporation tax returns, cleared the Companies House filing backlog, and implemented a monthly financial review process to prevent future backlogs.
Key Achievements
- MTD for VAT compliance achieved and HMRC compliance notice formally resolved within eight weeks.
- Payroll errors corrected across all 15 employees, eliminating PAYE risk and restoring staff confidence.
- CIS underpayment of £14,300 identified and managed through an agreed HMRC instalment arrangement.
- Year-end accounts turnaround reduced from 3 months to 3 weeks, saving £1,800 in late filing penalties.
- All Companies House filings brought up to date; company secretarial now managed on a rolling annual basis by Legend Fusions.
- Client’s management information is now real-time, enabling Khalid to make faster, data-driven decisions.
Conclusion
Khan Build Ltd’s transformation illustrates the operational and financial risks that arise when a growing business’s backoffice cannot keep up with its growth. Legend Fusions delivered far more than a compliance fix: we restructured the company’s entire financial infrastructure, eliminating regulatory exposure, recovering historical errors, and equipping Khalid with the real-time insight he needs to manage a scaling construction business with confidence.
Next Steps
Khan Build Ltd is now on a comprehensive monthly retainer with Legend Fusions, covering payroll, management
accounts, VAT returns, CIS submissions, and year-end compliance. The business is currently exploring its eligibility for EIS investment to fund the acquisition of specialist plant equipment, an opportunity our team has flagged as part of
their growth advisory work.
Client consent has been obtained. The company name and client details have been anonymised to protect confidentiality.
