Submit your CIS monthly return

If you are a CIS contractor, you must submit a monthly return to HMRC for each tax month, even if you made no payments to subcontractors. The return tells HMRC about payments to subcontractors and the CIS deductions you have made.

Failing to submit returns on time results in automatic penalties that escalate the longer you delay. This guide explains when and how to submit your returns, how to handle nil returns, and what happens if you miss the deadline.

Who must submit CIS monthly returns

You must submit monthly returns if you are:

• A mainstream contractor - a construction business paying subcontractors for construction work
• A deemed contractor - a non-construction business spending over 3 million pounds on construction in any rolling 12-month period

If you only use subcontractors occasionally, you still need to submit returns for every tax month - including nil returns when you made no payments.

Key deadlines

CIS operates on a monthly cycle. Each tax month runs from the 6th of one month to the 5th of the following month (for example, 6 May to 5 June).

Example: For payments made between 6 May and 5 June, your return must be filed by 19 June. If paying electronically, you have until 22 June to pay the deductions to HMRC.

Filing your CIS monthly return

The monthly return (CIS300) reports all payments made to subcontractors during the tax month. HMRC uses this information to track CIS deductions and ensure subcontractors can offset them against their tax liability.

Calculating CIS deductions

Before you can complete your return accurately, you need to calculate the correct CIS deduction for each payment. The deduction rate depends on whether the subcontractor is registered with CIS and whether they have gross payment status.

The key principle is that CIS deductions apply only to the labour element of the payment - you must exclude VAT and materials costs before applying the deduction rate.

Nil returns - when you have not paid subcontractors

If you made no payments to subcontractors during a tax month, you must still inform HMRC. You have two options:

Option 1: Submit a nil return

File a CIS300 showing no payments. This is due by the 19th of the following month, just like a normal return. Use the CIS online service to submit a nil return.

Option 2: Request an inactivity period

If you expect no payments to subcontractors for an extended period, you can request inactivity for up to 6 months at a time. During this period, HMRC will not expect returns from you. Under the rules in force since 6 April 2026 (SI 2026/289), the request counts as advance notification and must be in place no later than 14 days before the start of the tax month it covers.

Important: If you make any payment to a subcontractor during an inactivity period, you must immediately notify HMRC and submit a return for that tax month. Failing to do so triggers late filing penalties.

Consequences of not filing nil returns

If you do not file a return and have not requested inactivity, HMRC will assume you have made payments and failed to report them. This triggers:

• Automatic late filing penalties (starting at 100 pounds)
• Potential compliance enquiries
• Risk to your contractor registration if persistent

Late filing penalties

HMRC charges automatic penalties for late CIS returns. Penalties apply separately to each return that is late, so missing multiple deadlines results in multiple penalties.

Appealing a penalty

You can appeal a CIS late filing penalty if you have a reasonable excuse, such as:

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

You must appeal within 30 days of receiving the penalty notice. Common excuses that are not accepted include: relying on someone else to file for you, being too busy, or not knowing about the deadline.

Paying CIS deductions to HMRC

After submitting your return, you must pay the total CIS deductions to HMRC. If you also run a PAYE payroll, CIS deductions are usually paid together with your PAYE and National Insurance liabilities.

Payment deadlines

• Electronic payment (Bacs, CHAPS, online banking, Direct Debit): 22nd of the month following the tax month
• Postal payment (cheque): 19th of the month following the tax month

If the deadline falls on a weekend or bank holiday, payment must reach HMRC on the last working day before.

Payment reference

Use your 13-character Accounts Office reference followed by the tax year and month number. Getting the reference wrong can delay allocation to your account and may result in late payment notices.

Record keeping requirements

You must keep records of all CIS transactions for at least 3 years after the end of the tax year they relate to. Records should include:

• Subcontractor details (name, UTR, verification number)
• Gross payment amounts and materials costs claimed
• CIS deductions made
• Payment and deduction statements issued
• Verification responses from HMRC

HMRC can request these records during a compliance check. Failure to produce records when requested can result in a penalty of up to 3,000 pounds.

Amending a submitted return

If you discover an error after submitting a CIS return, you can amend it:

• Current and previous tax year: Use the CIS online service to amend returns
• Earlier tax years: Contact HMRC's CIS helpline

If you have underpaid deductions, pay the additional amount as soon as possible to minimise interest. If you have overpaid, HMRC will credit your account and reduce future payments due.