CIS Returns Explained: Filing Your Monthly CIS Return

If you pay subcontractors under the Construction Industry Scheme, you have to file a CIS return every month — even in months where you've paid nobody. Miss the deadline and the penalties start at £100 and climb fast. This is the contractor side of CIS, and it trips up firms that are otherwise on top of their tax.

Here's exactly what a monthly CIS return is, when it's due, what goes on it, and how to avoid the penalties that catch people out.

What a CIS Return Is

A CIS return is the monthly report a contractor sends HMRC declaring the payments made to subcontractors and the CIS deductions taken from them. It's how HMRC tracks the tax that contractors withhold on behalf of their subcontractors.

You file a CIS return if you're a contractor — a business that pays subcontractors for construction work. (If you're a subcontractor being paid, you don't file CIS returns; the deductions come off your invoices and you reconcile them through your own Self Assessment or Corporation Tax return. See our CIS invoice template guide for that side.)

Some businesses are both — they take on subcontractors AND work as subcontractors for larger firms. If that's you, you file returns for the work you contract out and have deductions taken on the work you do for others.

The Deadline: 19th of Every Month

According to HMRC, you must "send your monthly returns to HMRC by the 19th of every month following the last tax month."

The CIS tax month runs from the 6th of one month to the 5th of the next. So:

• The tax month 6 April – 5 May is reported by 19 May
• The tax month 6 May – 5 June is reported by 19 June

The 19th is the filing deadline. Paying the deductions to HMRC has its own deadline: the 22nd of the month if you pay electronically, or the 19th if you pay by post. The return itself is always the 19th.

What Goes on a CIS Return

For each subcontractor you paid in the tax month, the return records:

• The subcontractor's name and verification/UTR details
• The total amount paid
• The cost of materials (which is excluded from the CIS deduction)
• The amount of CIS deducted

You also have to make a declaration. HMRC is specific: on your return, "you must declare that the subcontractors listed are not employees." This is the employment-status declaration — getting subcontractor status wrong is a separate and serious compliance risk, so this confirmation matters.

CIS deductions are calculated on the labour portion only — never on materials, VAT, or plant hire. The standard rate is 20% for verified, registered subcontractors and 30% for unverified or unregistered ones. Use the CIS Deduction Calculator to check the deduction on any payment before it goes on the return.

Nil Returns: Months With No Subcontractor Payments

This is the rule most contractors miss. If you've paid no subcontractors in a tax month, you still have an obligation. HMRC gives two options: either "file a return showing your payments were 0 (known as a 'nil return')" or tell HMRC you've temporarily stopped using subcontractors through an inactivity request.

If you do neither, HMRC assumes a return is outstanding and the late-filing penalty applies — for a month where you owed nothing. Filing a nil return takes minutes; the inactivity request pauses the obligation for up to six months. One of the two must happen.

Late-Filing Penalties

The penalties for a late CIS return escalate quickly and stack across multiple late returns. Per HMRC's published schedule:

How late	Penalty
1 day late	£100
2 months late	£200
6 months late	£300 or 5% of the CIS deductions on the return, whichever is higher
12 months late	£300 or 5% of the CIS deductions on the return, whichever is higher

Beyond 12 months, in serious cases, there's an additional penalty of "up to £3,000 or 100% of the CIS deductions on the return, whichever is higher."

The crucial point: these are per return. Forget to file for three months and you're not looking at one £100 penalty — you're looking at the schedule applied to each outstanding month. A contractor who goes quiet over a slow winter and forgets the nil returns can return to several hundred pounds in penalties for months where no tax was even due.

How to File

You file CIS returns through HMRC's CIS online service or through commercial CIS/payroll software that submits directly to HMRC. Before you can pay a new subcontractor, you also have to verify them with HMRC — this confirms whether they're registered (20%) or not (30%), and you record the verification number on the return.

The practical workflow each month:

1. Verify any new subcontractors before their first payment
2. Record each payment, splitting labour from materials
3. Calculate the deduction on the labour portion (20% or 30%)
4. Issue each subcontractor a payment and deduction statement within 14 days of the tax month end
5. File the return by the 19th — nil return if you paid nobody
6. Pay HMRC the deductions (19th by post, 22nd electronically)

Common CIS Return Mistakes

Forgetting the nil return. The single most common cause of needless penalties. No payments still means a filing obligation.

Deducting from the wrong amount. CIS comes off labour only. Including materials in the deduction base over-deducts and creates reconciliation problems for the subcontractor.

Not verifying subcontractors. An unverified subcontractor must be treated at 30%. Verify first, then pay.

Missing the payment and deduction statements. Subcontractors need these within 14 days to reclaim their deductions. Late statements create friction and chasing.

Treating the 19th as flexible. It isn't. The penalty applies from one day late.

For the full picture on how CIS works end to end — registration, deduction rates, gross payment status, and the subcontractor side — see our complete CIS payments guide.

This is general guidance on CIS return obligations, not tax advice. CIS has specific compliance rules and the penalties are real — consult a qualified accountant or HMRC for your circumstances.

Sources

• File your monthly CIS returns — GOV.UK
• What you must do as a CIS contractor — GOV.UK
• CIS contractor: make deductions and pay subcontractors — GOV.UK
• Pay CIS deductions to HMRC — GOV.UK