If you pay subcontractors for construction work, you need to file a CIS monthly return with HMRC. This guide explains what goes on the return, the deadlines, how nil returns work after the April 2026 changes and what happens if you file late. It is written for contractors, including subcontractors who also take on labour of their own. Figures were checked against GOV.UK and HMRC’s CIS 340 guidance.
What is a CIS monthly return?
The CIS monthly return (form CIS300) tells HMRC every payment you made to subcontractors in a tax month, how much CIS you deducted and whether each subcontractor was paid gross. A tax month runs from the 6th of one month to the 5th of the next, so the return for 6 September to 5 October covers every payment you made in that period.
CIS return deadlines
- The return: due by the 19th of the month, 14 days after the end of the tax month.
- Payment and deduction statements: each subcontractor you deducted from must receive a statement within 14 days of the end of the tax month, so also by the 19th.
- Paying the deductions to HMRC: CIS deductions are paid with your PAYE, by the 22nd of the month if you pay electronically.
How to file a CIS monthly return, step by step
- Verify new subcontractors before you pay them. HMRC tells you whether to pay gross, deduct at the standard 20% rate or deduct at the higher 30% rate. You do not need to verify someone you included on a return in the current or previous two tax years.
- Split each invoice into labour and materials. CIS is deducted from labour only. Materials the subcontractor bought for the job, and VAT, are left out of the calculation.
- Calculate and make the deduction. For example, a registered subcontractor invoicing £2,400 of labour and £600 of materials has £480 deducted, leaving £2,520 to pay. Our guide to CIS deductions covers more examples.
- Complete the return. Enter each subcontractor, the gross amount paid, the cost of materials and the amount deducted, then confirm the verification and employment status declarations.
- Submit it. File through HMRC’s CIS online service or through CIS-enabled accounting software such as Xero or QuickBooks.
- Send statements and pay HMRC. Issue a payment and deduction statement to each subcontractor and include the deductions in your PAYE payment.
Nil returns and the April 2026 changes
If you made no payments to subcontractors in a tax month, you still need to tell HMRC. Since 6 April 2026, a nil return has been a legal requirement for any month with no payments, unless you have told HMRC in advance that you will not be paying subcontractors. You can ask HMRC to treat your scheme as inactive for up to six months, and you need to tell HMRC again if you start paying subcontractors before then.
Other changes from 6 April 2026 include:
- payments made to local authorities and other public bodies are now outside CIS
- HMRC can remove gross payment status straight away where a business knew, or should have known, that a payment was connected to fraud and the business can be liable for the tax lost, with penalties that can also fall on directors
- a business that loses gross payment status in this way cannot reapply for five years, up from one
Penalties for late CIS returns
| How late | Penalty |
|---|---|
| 1 day | £100 |
| 2 months | A further £200 |
| 6 months | A further £300 or 5% of the CIS deductions on the return, whichever is higher |
| 12 months | A further £300 or 5% of the deductions, whichever is higher and in serious cases up to £3,000 or 100% of the deductions |
Penalties apply to each late return, including nil returns, so a few missed months can add up quickly. If you have a reasonable excuse for filing late, you can appeal.
Common CIS return mistakes
- deducting CIS from materials or VAT
- paying a new subcontractor before verifying them
- forgetting the nil return in a quiet month
- issuing statements late or not at all, which leaves subcontractors unable to claim their deductions back
- confusing CIS with the VAT domestic reverse charge, which is a separate set of rules
Frequently asked questions
When is the CIS monthly return due?
By the 19th of each month, covering payments made in the tax month that ended on the 5th.
Do I need to file a CIS return if I paid no subcontractors?
Yes, unless you told HMRC in advance that your scheme would be inactive. Otherwise a nil return is required, and a missed nil return attracts the same £100 penalty as a missed full return.
Can I file a CIS return without software?
Yes. HMRC’s free CIS online service lets you file returns and verify subcontractors. Most contractors with regular subcontractors find it easier to use accounting software that links the return to their payroll and bookkeeping.
Do subcontractors file a CIS return?
No. Only contractors file CIS returns. Subcontractors claim their deductions back through their Self Assessment return or, for limited companies, by offsetting them against PAYE. If you are just starting out, our guide to registering for CIS explains the first steps.
NDCA files CIS returns for contractors across the UK as part of a fixed monthly fee. See our CIS accountant service or book a free consultation.
Need help with CIS?
NDCA is an ACCA-regulated accountancy practice with fixed monthly fees and a named accountant. Book a free consultation and pick a time that suits you.
Areas we cover
NDCA works with clients across the following regions. If you are based in one of these areas, our team can help with the accounting issues covered in this article.
