CIS monthly return deadline: When and how to file your CIS return

If you’re a contractor in the UK construction industry, the CIS monthly return deadline is a date you simply cannot afford to ignore. Every month, you are legally required to tell HMRC:

• How much you have paid your subcontractors, and
  
• How much Construction Industry Scheme (CIS) tax you have deducted.
  

Miss the deadline by even one day and HMRC can issue an automatic £100 penalty. Fall behind for several months and those penalties can easily grow into four-figure sums, before you even consider interest or the risk to your gross payment status.

This guide is written from the perspective of a UK accountant who regularly looks after CIS for contractors, developers and property businesses. We will cover:

• The exact CIS monthly return deadline and how the CIS “tax month” works
  
• Who must file CIS returns
  
• Step-by-step how to complete and file a CIS300
  
• Real examples (Person A and Person B) with figures
  
• What happens if you file late or make mistakes
  
• How to stay compliant and protect your cash flow
  

At a glance: CIS monthly return deadline

For quick reference:

• CIS tax month: 6th of one month to 5th of the next
  
• CIS monthly return deadline: 19th of the following month
  
• Form: CIS300 monthly return
  
• Who files: All CIS contractors (including “deemed contractors”)
  
• Nil months: You must still deal with the month – either by filing a nil return or confirming no return is due
  
• Penalties: Start at £100 per late return, increasing at 2, 6 and 12 months late
  

Example:

• Payments made between 6 May and 5 June
  
• Must be reported on a CIS300
  
• The return must reach HMRC no later than 19 June
  

What is a CIS monthly return?

Under the Construction Industry Scheme, contractors deduct tax from payments to subcontractors. Those deductions are treated as advance payments towards the subcontractors’ income tax and National Insurance.

The CIS monthly return (CIS300) is the report you submit to HMRC every month summarising these transactions. In that return, you:

• List each subcontractor you paid in the tax month
  
• Show the gross amount paid (normally excluding VAT)
  
• Identify what relates to labour and what relates to materials and other costs
  
• Apply the correct CIS rate (0%, 20% or 30%)
  
• Show the CIS tax deducted
  
• Confirm that each person listed is a subcontractor, not an employee
  
• Confirm that you have completed the required verification checks
  

You must file a return for each tax month in which you are a CIS contractor, even if you made no payments or all your subcontractors are on gross payment status.

Who must file a CIS monthly return?

You must file CIS monthly returns if you are classed as a contractor for CIS purposes. This includes:

1. Mainstream contractors

Businesses whose main activity is construction work in the UK and who pay subcontractors. Typical examples:

• Building contractors
  
• Electrical contractors
  
• Plumbing and heating contractors
  
• Groundworks specialists
  
• Refurbishment contractors
  

2. Deemed contractors

You may also have CIS obligations as a “deemed contractor” if you are not in construction but spend heavily on construction operations. This can include:

• Property investment companies
  
• Retailers, manufacturers or service businesses with large fit-out or refurbishment programmes
  
• Housing associations and certain public bodies
  

Once your construction spending passes the relevant thresholds, you can become a deemed contractor and must start operating CIS, including filing monthly returns.

Note:
If you operate purely as a subcontractor and do not pay anyone else under CIS, you do not file CIS monthly returns. Instead, you receive CIS deduction statements from contractors and claim or offset those deductions via your own tax position.

CIS tax month versus calendar month

A common source of confusion is that CIS works on a tax month, not a normal calendar month.

• A CIS tax month runs from the 6th of one month to the 5th of the next.
  
• The CIS monthly return deadline is the 19th of the month following the tax month.
  

Some examples:

In other words, you have 14 days from the end of the tax month to file the return.

What goes on a CIS monthly return?

For each subcontractor you paid in the tax month, you will normally need:

• Full name and business name (if applicable)
  
• Unique Taxpayer Reference (UTR)
  
• HMRC verification number (for new or unverified subcontractors)
  
• Total gross amount paid, usually excluding VAT
  
• Amount attributable to materials, plant hire and certain other costs
  
• Amount attributable to labour
  
• CIS rate applied:
  
  • 0% – gross payment status
    
  • 20% – registered subcontractor
    
  • 30% – unregistered or unverified subcontractor
    
• The CIS tax deducted on the labour element
  

You also make declarations that:

• You are satisfied the people listed are subcontractors, not employees
  
• You have checked each subcontractor’s status and completed verification where required
  

How to calculate CIS correctly

CIS is generally calculated on the labour element only, not on:

• Materials
  
• VAT
  
• Certain plant hire charges
  
• Some fuel and consumables that are recharged at cost
  

If you calculate CIS on the full invoice value (including materials and VAT), you will be over-deducting and may face pressure from subcontractors to correct the position.

Example – Person A (small contractor)

Person A runs a small construction company and receives an invoice from a subcontractor for work completed in September:

• Labour: £6,000
  
• Materials: £2,000
  
• VAT @ 20%: £1,600
  
• Total invoice: £9,600
  

The subcontractor is correctly verified and is subject to standard CIS at 20%.

1. CIS applies to labour only, not materials or VAT
   
2. CIS taxable amount = £6,000
   
3. CIS deduction @ 20% = £1,200
   
4. Amount actually paid to subcontractor:
   
   • Invoice total: £9,600
     
   • Less CIS deduction: £1,200
     
   • Net payment: £8,400
     

On the CIS300 for the tax month 6 September – 5 October, Person A reports:

• Gross amount paid (excluding VAT): £8,000 (labour £6,000 + materials £2,000)
  
• Cost of materials: £2,000
  
• CIS tax deducted: £1,200
  

That £1,200 is then paid over to HMRC with their PAYE/CIS payment.

Step-by-step: how to file your CIS monthly return

Step 1 – Gather your records (for the tax month)

For each tax month (6th–5th), collect:

• All invoices from subcontractors dated in that period
  
• Evidence of verification for new subcontractors
  
• Labour and materials split on each invoice
  
• Records of actual payments (including retentions, contras, credit notes)
  
• Copies of Payment and Deduction Statements issued to subcontractors
  

Having a clear CIS control account in your bookkeeping software is extremely helpful.

Step 2 – Confirm subcontractor status and CIS rate

Check:

• Whether the individual is genuinely a self-employed subcontractor and not an employee
  
• That you have the correct UTR and, where required, a verification
  
• The correct CIS rate (0%, 20% or 30%)
  

Mistakes here can create under-deduction (risk for you) or over-deduction (cash flow problems for the subcontractor).

Step 3 – Calculate CIS on the labour element

For each invoice:

1. Identify the labour amount
   
2. Apply the correct CIS rate to that amount
   
3. Record:
   
   • Gross amount (normally ex-VAT)
     
   • Materials/other costs
     
   • Labour
     
   • CIS tax deducted
     

Ensure your calculations and software settings match.

Step 4 – Complete the CIS300

You can file your CIS300:

• Through HMRC’s CIS online service, or
  
• Through CIS-enabled accounting/payroll software that submits directly to HMRC.
  

When completing the return:

• Select the correct tax month
  
• Enter subcontractor details and amounts
  
• Review totals and spot-check a few entries against invoices
  
• Tick the employment status and verification declarations
  
• Submit the return and save the submission receipt for your records
  

Step 5 – Deal with nil months and periods of inactivity

If you have a tax month in which you pay no subcontractors, you still need to address that month. In practice you will either:

• File a nil CIS return via your software, or
  
• Notify HMRC that no return is due for that tax month, or
  
• Agree an inactivity period (commonly up to 6 months) where no returns are expected.
  

From a risk management point of view, many businesses simply file a nil return each month where no payments have been made. It takes only a few minutes and avoids any ambiguity.

CIS payments vs CIS filing: two separate deadlines

It is important to distinguish between:

1. Filing the CIS300 monthly return, and
   
2. Paying the CIS deductions to HMRC.
   

• CIS return filing deadline:
  
  • 19th of the month following the tax month.
    
• Payment deadline for CIS and PAYE/NIC:
  
  • 19th of the following month if you pay by post or cheque
    
  • 22nd of the following month if you pay electronically
    

Most contractors pay CIS deductions together with their PAYE and NIC in a single payment. Your payroll reports and accounts should show clearly how much of that payment relates to CIS.

Penalties for missing the CIS monthly return deadline

HMRC operates a structured penalty regime for late CIS returns.

Standard CIS late filing penalties

Per monthly return:

• 1 day late – £100
  
• 2 months late – additional £200 (total £300)
  
• 6 months late – additional £300, or 5% of the CIS liability, whichever is higher
  
• 12 months late – further £300, or 5% of the CIS liability, whichever is higher
  

In more serious or deliberate cases, HMRC can charge significantly higher penalties, potentially up to 100% of the CIS tax due.

Example – Person B (contractor falling behind)

Person B runs a medium-sized contractor business and, due to workload and poor internal systems, does not file CIS returns for three months.

• Month 1 CIS deductions: £4,000
  
• Month 2 CIS deductions: £5,500
  
• Month 3 CIS deductions: £6,200
  

Assume all three returns are filed 7 months late.

Per return:

• At 1 day late: £100
  
• At 2 months late: +£200 (total £300)
  
• At 6 months late: +£300, or 5% of CIS liability if higher
  

For Month 3, 5% of £6,200 = £310, which is higher than £300, so the 6-month penalty is £310.

Penalties could look broadly like this:

• Month 1: £100 + £200 + £300 = £600
  
• Month 2: £100 + £200 + £300 = £600
  
• Month 3: £100 + £200 + £310 = £610
  

Total penalties: £1,810, on top of the actual CIS deductions and any interest on late payment. If HMRC considers the behaviour careless or deliberate, further penalties are possible.

How late or incorrect CIS returns affect gross payment status

For subcontractors, gross payment status (being paid without deductions) is vital to healthy cash flow. To obtain and keep gross status, HMRC looks at:

• Whether you are genuinely in business and working in construction
  
• Your turnover from construction work (ignoring VAT and materials), which must meet minimum thresholds
  
• Your overall tax compliance, including:
  
  • CIS monthly returns
    
  • PAYE and NIC
    
  • VAT
    
  • Corporation Tax or Self Assessment
    

Repeated late filing or poor CIS compliance can count against you in HMRC’s annual review of gross payment status. Contractors who rely on gross status to support bank lending, supplier relationships and project cash flow should be particularly careful to avoid CIS penalties.

CIS record-keeping requirements

As a CIS contractor, you must keep proper records to support your returns. In practice, this means:

• Keeping CIS records for at least three years after the end of the tax year they relate to (many businesses keep them for six years)
  
• Retaining:
  
  • Subcontractor invoices
    
  • Contracts and engagement letters
    
  • CIS300 returns and submission receipts
    
  • Verification records
    
  • Payment and Deduction Statements sent to subcontractors
    
  • Evidence of materials and other costs excluded from CIS
    

If HMRC asks to review your CIS records and you cannot produce them, you can face additional penalties separate from any late filing charges.

CIS monthly return checklist (practical accountant’s version)

To keep on top of CIS each month, here is a simple checklist you can follow.

At the end of each tax month (on or after the 6th)

1. Confirm the tax month just ended (for example, 6 July – 5 August).
   
2. Run a report of all subcontractor payments in that period.
   
3. Check that each subcontractor is verified and that the correct rate has been used.
   
4. Ensure invoices clearly separate labour and materials.
   
5. Calculate CIS deductions correctly on the labour element.
   
6. Update your CIS control account in your accounts software.
   

Before the 19th of the month

7. Prepare and send Payment and Deduction Statements to subcontractors.
   
8. Complete your CIS300 return using HMRC’s service or your software.
   
9. Review and submit the return by the 19th.
   
10. If there were no subcontractor payments, file a nil return or confirm with HMRC that no return is due.
    

Before the PAYE/CIS payment deadline

11. Arrange payment of CIS deductions (with PAYE/NIC) to HMRC by the appropriate deadline (19th or 22nd, depending on payment method).
    
12. Reconcile the payment to your CIS and PAYE/NIC records.
    

Ongoing

13. Keep CIS records filed logically by tax month and tax year.
    
14. Review your CIS processes at least annually, especially if you are on or aiming for gross payment status.
    

How Bloom Financials can help with CIS compliance

CIS is a classic example of a task that doesn’t generate revenue but can be expensive when it goes wrong. Penalties, interest, damaged relationships with subcontractors and risks to gross payment status can all hit your business at once.

As accountants, we regularly help:

• Contractors working on local, regional and national projects
  
• Property developers and investors
  
• Businesses that have unexpectedly become deemed contractors
  

Our CIS support typically includes:

• Reviewing and setting up CIS-compliant systems and processes
  
• Monthly preparation and submission of CIS300 returns
  
• Reconciliation of CIS with PAYE and corporation tax
  
• Advising on:
  
  • Employment status
    
  • Deemed contractor rules
    
  • Complex invoicing (retentions, contra-charges, mixed supplies)
    
  • Applications for, and retention of, gross payment status
    

If you prefer to focus on winning and delivering projects rather than worrying about the 19th of every month, delegating CIS to a dedicated professional team can significantly reduce your risk and free up your time.

CIS monthly return – key FAQs