Guide

Your CIS monthly compliance cycle

A day-by-day workflow for CIS compliance throughout the tax month cycle. Shows contractors exactly what to do and when, from the 6th to the 22nd, to avoid penalties and stay compliant with HMRC. Addresses the most common pain point for construction businesses - managing the continuous administrative burden of CIS.

Construction & Property UK-wide

CIS compliance can feel overwhelming because obligations are spread across the month rather than being a single task. This guide breaks down exactly what you need to do and when, so you can build CIS into your regular workflow without missing deadlines.

The key to managing CIS without stress is understanding the tax month cycle - it does not follow calendar months. Once you understand the rhythm, compliance becomes routine rather than reactive.

Understanding the CIS tax month

CIS operates on tax months, not calendar months. Each tax month runs from the 6th of one month to the 5th of the following month. For example:

  • Tax month 2 (May): 6 May to 5 June
  • Tax month 3 (June): 6 June to 5 July
  • Tax month 4 (July): 6 July to 5 August

This affects all your deadlines - returns and payments relate to the tax month, not the calendar month.

Your weekly CIS workflow

Breaking the month into weekly tasks makes CIS manageable. Here is what to do each week of the tax month:

Week 1: Days 6-12 - Start of tax month

The new tax month begins on the 6th. This is when you should:

  • Verify any new subcontractors - Before making your first payment to anyone new, verify them with HMRC. You need their name, UTR, and National Insurance number (for sole traders) or company registration number (for limited companies).
  • Review your subcontractor list - Check if any subcontractors need re-verification. You must re-verify if they have not been on any of your returns in the current or previous 2 tax years.
  • Make payments as normal - Record all payments to subcontractors during this period. Note the gross amount, materials cost, and CIS deduction for each payment.

Week 2: Days 13-19 - Mid-month action zone

This is your busiest week for CIS administration. The 19th is a critical deadline:

  • Days 13-18: Gather your records - Collect all payment records, invoices, and materials evidence from the previous tax month (which ended on the 5th).
  • Day 14: Statement deadline - You must issue Payment and Deduction Statements to subcontractors within 14 days of the tax month end. For a tax month ending on 5 June, statements are due by 19 June.
  • Day 19: Return deadline - Submit your CIS300 monthly return by the 19th. This covers the previous tax month. Late filing triggers automatic penalties starting at 100 GBP.

Tip: Submit your return a few days early to avoid last-minute problems. System issues on deadline day are not accepted as a reasonable excuse.

Week 3: Days 20-22 - Payment window

After filing your return, you have until the 22nd to pay:

  • Day 22: Electronic payment deadline - Pay CIS deductions to HMRC by this date if paying electronically (Bacs, CHAPS, online banking, Direct Debit). If the 22nd falls on a weekend or bank holiday, payment must clear by the last working day before.
  • Note: If paying by post, the deadline is the 19th (same as the return deadline).

Payment reference: Use your 13-character Accounts Office reference followed by the tax year and month. Getting this wrong delays payment allocation and may trigger late payment notices.

Week 4: Days 23-5 - Preparation for next cycle

Use the remaining days to prepare for the next tax month:

  • Check your records - Ensure all payments this month are properly documented with deduction calculations.
  • Chase missing materials evidence - If subcontractors have claimed materials but not provided receipts, follow up now.
  • Review any errors - If you spot mistakes in this month's return, plan corrections for next month.
  • Set reminders - Mark key dates for the upcoming cycle in your calendar.

Monthly CIS checklist

Use this checklist to ensure you complete all CIS obligations each month. Tick off each item as you complete it.

Key deadlines at a glance

These deadlines apply every month. Set recurring calendar reminders for each:

What to do if you miss a deadline

Missed the 19th (return deadline)

File immediately - do not wait until next month. Penalties increase the longer you delay:

  • 1 day late: 100 GBP penalty
  • 2 months late: Additional 200 GBP (total 300 GBP)
  • 6 months late: Additional penalty (greater of 300 GBP or 5% of CIS deducted)
  • 12 months late: Additional penalty (greater of 300 GBP or 5% of CIS deducted)

File as soon as you realise. Even if it is only a day late, the penalty is much less than waiting.

Missed the 22nd (payment deadline)

Pay immediately. Interest is charged on late payments from the due date until payment is received. If you consistently pay late, HMRC may take further action including issuing a payment plan or using debt collection.

Appealing a penalty

You can appeal if you have a reasonable excuse such as:

  • Serious illness or hospitalisation preventing filing
  • Bereavement of a close family member
  • Fire, flood, or other disaster affecting records
  • HMRC system failure (if documented)

Common excuses that are not accepted: being too busy, relying on someone else, not knowing about the deadline, or pressure of work.

Appeal within 30 days of receiving the penalty notice.

Nil returns - when you have not paid subcontractors

If you made no payments to subcontractors during a tax month, you still have obligations:

Option 1: Submit a nil return

File a CIS300 return showing zero payments. This is due by the 19th, just like a normal return. A nil return takes only a few minutes through the CIS online service.

Option 2: Request inactivity

If you expect no subcontractor payments for an extended period, request inactivity for up to 6 months. During this period, HMRC will not expect returns from you.

Important: If you make any payment during an inactivity period, you must immediately notify HMRC and submit a return. Failure to do so triggers penalties.

April 2026 change

From April 2026, nil return requirements are being reinforced. HMRC will expect a return for every tax month unless you have requested inactivity. Build nil returns into your workflow even if you only occasionally use subcontractors.

Building CIS into your routine

The most successful contractors treat CIS as a weekly habit rather than a monthly crisis. Here are practical tips:

Weekly admin slot

Set aside 30 minutes each week for CIS tasks:

  • Monday: Review any new subcontractors starting this week - verify them before first payment.
  • Friday: Enter the week's payments into your records while details are fresh.

Monthly deadline reminders

Set calendar reminders for:

  • 14th of the month: Statement deadline approaching - start preparing.
  • 17th of the month: Final check of return data before filing.
  • 19th of the month: Return deadline - file by midday to allow for any issues.
  • 20th of the month: Payment reminder - process HMRC payment.

Record keeping system

Keep a dedicated CIS folder (physical or digital) with:

  • Subcontractor details and verification numbers
  • Copy of each month's return
  • Payment and deduction statements issued
  • Evidence of materials costs
  • HMRC payment confirmations

HMRC can request records for 3 years after the end of the tax year.

Using software to reduce the burden

Payroll and accounting software can automate much of the CIS process:

  • Verification: Many packages integrate with HMRC to verify subcontractors automatically.
  • Calculations: Software calculates deductions based on the verified rate.
  • Returns: File CIS300 directly through software rather than the HMRC website.
  • Statements: Generate payment and deduction statements automatically.
  • Reminders: Built-in deadline alerts.

If you use subcontractors regularly, investing in CIS-compatible software can save significant time and reduce errors.

HMRC maintains a list of commercial software suppliers recognised for CIS returns.

  1. Set up your CIS calendar

    Create recurring calendar reminders for the 14th, 17th, 19th, and 22nd of each month with the relevant CIS task. Allow time before each deadline rather than leaving things until the last minute.

  2. Create a subcontractor register

    Set up a spreadsheet or use software to track each subcontractor's name, UTR, verification number, verification date, and deduction rate. Review this at the start of each tax month.

  3. Establish a weekly CIS routine

    Block 30 minutes each Friday to enter the week's subcontractor payments. This prevents a backlog building up before the return deadline.

  4. Prepare your materials evidence folder

    Create a folder for each tax month to collect materials receipts and supplier invoices from subcontractors. This makes deduction calculations straightforward.

  5. File your first return early

    For your next return, submit by the 17th instead of the 19th. This gives you a buffer and reduces deadline stress.

  6. Sign up for HMRC email reminders

    HMRC can send you email reminders before deadlines. Set these up through your Government Gateway account.

Use the Construction Industry Scheme online

Related guides

  • Submit your CIS monthly return - detailed step-by-step guide to completing the CIS300
  • Calculate CIS deductions - how to work out the correct deduction from each payment
  • Verify a subcontractor's CIS status - how to verify subcontractors before first payment
  • Register as a CIS contractor - initial registration process if you are new to CIS
  • Common CIS mistakes - how to avoid the most frequent compliance errors

Submit your CIS monthly return

Monthly reporting requirement for contractors under the Construction Industry Scheme. Covers filing deadlines, what to include in your return, nil returns, calculating deductions, and penalties for late filing.

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What to do if you've missed a CIS deadline

Immediate steps when you have missed the 19th filing deadline or 22nd payment deadline for CIS monthly returns. Covers penalty mitigation, filing late returns, making late payments, and how to reduce your exposure to escalating penalties.

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Using occasional labour on construction jobs - your CIS obligations

A scenario-based guide for sole traders who sometimes hire labourers for construction jobs. Explains when the Construction Industry Scheme (CIS) applies, what you must do, and the consequences of getting it wrong. Written in plain English for tradespeople like plumbers, electricians, and builders who occasionally need an extra pair of hands.

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