Main contractors must submit a CIS monthly return to HMRC by the 19th following the end of each CIS tax month. Missing this deadline can lead to automatic penalties, while incorrect subcontractor details, deduction rates or material costs can create further tax exposure.
For construction businesses managing several sites and subcontractor teams, the return should be treated as a monthly accounting process rather than a last minute filing task.
What is a CIS monthly return?
A Construction Industry Scheme monthly return reports payments made to subcontractors during a CIS tax month. Each tax month runs from the 6th of one month to the 5th of the next, and the return must reach HMRC by the following 19th.
For example, a return covering payments from 6 September to 5 October must be submitted by 19 October. The return must include all relevant subcontractor payments, whether the subcontractor was paid gross, at the standard deduction rate or at the higher deduction rate.
What must be submitted by the 19th?
Before filing, the main contractor should reconcile the subcontractor ledger, purchase invoices, payment records and CIS verification results. The return normally includes:
- The subcontractor’s correct name and tax details
- The verification number where required
- The total payment made during the tax month
- The cost of qualifying materials paid for directly by the subcontractor
- The total CIS tax deducted
- Confirmation that subcontractor employment status has been considered
- Confirmation that the correct verification process has been followed
The payment figure should be based on payments actually made during the tax month, not simply invoices received. Main contractors should therefore reconcile the return to the bank and supplier ledger before submission.
Check subcontractors before payment
A new subcontractor must normally be verified with HMRC before the first payment. A previous subcontractor must be verified again if they have not been included on a CIS return in the current tax year or either of the previous two tax years.
HMRC will confirm the applicable payment status. The usual CIS rates are 20% for a registered subcontractor, 30% for an unregistered subcontractor and 0% where gross payment status applies.
Verification does not decide whether a worker is genuinely self employed. Main contractors must consider employment status separately and confirm this on the monthly return. An incorrect employment status declaration can result in a penalty of up to £3,000.
Calculate deductions correctly
CIS is not normally deducted from the full invoice total. Start with the gross amount and exclude VAT before considering the deduction. Qualifying amounts paid by the subcontractor for materials, consumable stores, eligible plant hire, fuel other than travel fuel, and manufacturing or prefabrication may also be removed before applying the CIS rate.
The contractor should obtain evidence that the subcontractor paid for the materials directly. Unsupported or inflated material figures can understate CIS deductions and create a liability during an HMRC review.
The VAT domestic reverse charge is separate from CIS. The invoice may require reverse charge treatment for VAT while CIS is still calculated on the appropriate labour and service element. Accounting records should therefore show the VAT treatment and CIS calculation separately.
Do nil returns need filing?
From 6 April 2026, the requirement for mainstream contractors to file a nil return has been reinstated. If no subcontractors were paid during the tax month, the contractor must file a nil return or notify HMRC of a period of inactivity by the 19th.
An inactivity request can be useful where no subcontractor payments are expected for a period. However, if a payment is made during that period, the contractor should file the required return.
Return and payment deadlines
The filing deadline and payment deadline are not always the same:
| Obligation | Normal deadline |
|---|---|
| Submit the CIS monthly return | 19th following the tax month |
| Give payment and deduction statements | Within 14 days after the tax month, normally by the 19th |
| Pay deductions electronically | 22nd following the tax month |
| Pay deductions by post | 19th following the tax month |
CIS deductions are paid to HMRC with PAYE and National Insurance liabilities. Late payment may result in interest and penalties.
A contractor whose average combined PAYE and CIS liability is less than £1,500 per month may be permitted to pay quarterly, but monthly CIS returns are still required.
Payment and deduction statements
Where CIS tax has been deducted, the contractor must give the subcontractor a payment and deduction statement within 14 days after the end of the tax month. It should show the payment and deduction details and agree with the figures reported to HMRC.
This is an important control for main contractors. Differences between statements, supplier ledgers and CIS returns can delay subcontractor tax claims and may lead to disputes.
Penalties for late returns
A return filed one day late normally attracts a £100 penalty. If it remains outstanding, the penalty increases to £200 after two months. At six months and twelve months, further penalties are normally the higher of £300 or 5% of the deductions shown on the return. More serious cases may attract an additional penalty of up to £3,000 or 100% of the deductions.
A penalty can arise even when the return is nil. If there is a reasonable excuse, an appeal can normally be made within 30 days of the penalty notice.
Correcting CIS return errors
If an error is found after filing, it should be corrected promptly. HMRC says contractors should normally try to amend the return online first. Where this is not possible, the contractor may need to use compatible software or contact HMRC.
Do not carry an error into the next month to force the figures to balance. Keep a clear record of the original entry, the correction and supporting invoices or payment evidence.
Monthly controls for main contractors
A reliable CIS process should include:
- Closing site payment records shortly after the 5th
- Matching subcontractor invoices to bank payments
- Checking verification status before payment
- Separating labour, materials and VAT correctly
- Reviewing employment status and contract terms
- Reconciling CIS deductions to the PAYE account
- Issuing statements and filing before the 19th
- Saving the submission receipt and supporting report
CIS records must generally be kept for at least three years after the end of the relevant tax year. HMRC can impose a penalty of up to £3,000 where adequate records cannot be produced.
How Construction Tax Accountants can help
Construction Tax Accountants supports main contractors with the accounting records and tax checks needed for accurate CIS reporting. We can register your business correctly as a CIS contractor, verify subcontractors, review deduction rates, and reconcile site records, invoices, materials and payments. Our team can prepare and submit monthly CIS returns by the 19th, produce payment and deduction statements, and reconcile CIS, PAYE, National Insurance and HMRC balances. We can also correct previous return errors, respond to HMRC queries, and build reliable monthly controls across multiple sites and projects to protect cash flow and reduce the risk of penalties.
FAQs:
Is the CIS payment also due by the 19th?
The return is due by the 19th. Payment is normally due by the 22nd when paid electronically or by the 19th when paid by post.
Must gross payment subcontractors appear on the return?
Yes. Relevant payments must be reported even where the subcontractor has gross payment status and no tax is deducted.
What happens if no subcontractors were paid?
From 6 April 2026, a mainstream contractor must submit a nil return or notify HMRC of inactivity by the 19th.
Can a submitted CIS return be corrected?
Yes. The first option is normally to amend it through HMRC’s online service or compatible CIS software.
