The CIS monthly cycle at a glance
CIS compliance follows a predictable monthly rhythm. The key is understanding that CIS operates on tax months , not calendar months. Each tax month runs from the 6th of one month to the 5th of the next.
This journey takes 10 minutes. By the end, you will have a clear week-by-week workflow you can follow every month.
Understanding the tax month
The tax month cycle determines all your CIS deadlines. Get this right and compliance becomes routine.
The 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. Understanding this cycle is essential for meeting your compliance obligations.
Tax month start
6th of the month
Tax month end
5th of the following month
Payment period
Days 6 to 5 (make payments and record deductions)
Payment and Deduction Statement deadline
By 14 days after tax month end (by the 19th)
CIS300 monthly return deadline
19th of the month following the tax month
Electronic payment deadline
22nd of the month following the tax month
Postal payment deadline
19th of the month following the tax month
Example: May tax month
Event
Date
Tax month starts
6 May
Make payments to subcontractors
6 May - 5 June
Tax month ends
5 June
Issue Payment and Deduction Statements
By 19 June
Submit CIS300 return
By 19 June
Pay deductions electronically
By 22 June
Note: If a deadline falls on a weekend or bank holiday, the deadline is the next working day.
File your CIS monthly returns (opens in a new tab)
Your four-week CIS workflow
Breaking the month into weekly tasks makes CIS manageable. Here is what to do each week:
Week 1: Days 6-12 - Start of tax month
The new tax month begins on the 6th. This is your time to:
Verify any new subcontractors before you pay themCheck if anyone needs re-verification (not on returns for 2 tax years)Make payments and record deductions for all work this period
Always verify new subcontractors before first payment. HMRC tells you what rate to deduct: 0%, 20%, or 30%.
Quick reference: deduction rates
The verification result determines your deduction rate. Apply this to labour costs only.
Registered subcontractor rate
20%
Unregistered subcontractor rate
30%
Gross payment status rate
0% (no deductions)
Effective from
Current tax year 2026/27
Deduction basis
Labour element only (excluding VAT and materials)
When to apply each rate:
20% rate - Subcontractor is registered with HMRC for CIS
but does not have gross payment status. This is the standard rate for most
registered subcontractors.30% rate - Subcontractor is not registered with HMRC,
or their details cannot be verified. Always verify subcontractors before
first payment.0% rate (gross payment) - Subcontractor has been granted
gross payment status by HMRC. They receive full payment and account for tax
themselves via Self Assessment or Corporation Tax. Important: Deductions are calculated on the labour element only. Exclude VAT and any materials the subcontractor has directly paid for.
What is the Construction Industry Scheme (opens in a new tab)
CIS contractor - make deductions and pay subcontractors (opens in a new tab)
Set a Monday morning reminder to check if any new subcontractors are starting this week. Verify them before you pay - even a day late counts as failing to verify.
Week 2: Days 13-19 - Your busiest CIS week
This is the critical week. Two major deadlines fall on the 19th :
Day Action 13-18 Gather records for previous tax month (which ended on the 5th) By 19th Issue Payment and Deduction Statements to all subcontractors By 19th Submit your CIS300 monthly return
Tip: Submit your return by the 17th to allow for any system issues. Problems on deadline day are not accepted as a reasonable excuse.
Get your deduction calculations right before filing. Deduct from labour only - exclude VAT and materials.
File your CIS300 by the 19th. This covers all payments made in the previous tax month (6th to 5th).
Missing the 19th triggers automatic penalties. A return filed on the 20th costs you 100 pounds - even if it is only a day late.
Week 3: Days 20-22 - Payment window
After filing your return, you have until the 22nd to pay the deductions to HMRC.
Payment method Deadline Electronic (Bacs, CHAPS, online banking, Direct Debit) 22nd of the month Postal (cheque) 19th of the month
Payment reference: Use your 13-character Accounts Office reference. Only add the 4-digit tax year and month suffix if you are paying for a period other than the current one - adding it to an on-time payment for the current period can delay allocation.
CIS deductions are paid to HMRC alongside your PAYE. Use the correct payment reference.
If the 22nd falls on a weekend or bank holiday, payment must clear by the last working day before. Set up a Direct Debit to never miss the deadline.
Payment deadlines reference
Key dates for returns and payments each month.
Tax month definition
6th of one month to 5th of the following month
Monthly return deadline
19th of the month following the tax month
Electronic payment deadline
22nd of the month following the tax month
Postal payment deadline
19th of the month following the tax month
Payment and deduction statement (PDS) deadline
Within 14 days of end of each tax month
CIS returns cover a tax month which runs from the 6th of one month to the 5th of the next. For example, the return for 6 May to 5 June must be filed by 19 June. If paying CIS deductions electronically (including by Direct Debit, Bacs, or CHAPS), the deadline is the 22nd. If paying by post, the deadline is the 19th. You must give subcontractors a payment and deduction statement within 14 days of the end of each tax month.
File your CIS monthly returns (opens in a new tab)
Week 4: Days 23-5 - Review and prepare
Use the final days of the tax month to:
Check your records - Ensure all payments are properly documentedChase missing materials evidence - Follow up with subcontractors who claimed materials but have not provided receiptsReview any errors - If you spot mistakes, plan corrections for next month's returnSet reminders for next month - Mark the 17th (prepare), 19th (file), and 22nd (pay)
Create a simple CIS folder for each tax month. Drop in invoices, receipts, and payment records throughout the month. When the 13th arrives, you are ready to go.
Monthly CIS checklist
Bookmark this checklist and review it each month:
Your monthly CIS checklist
Tick off each item as you complete it throughout the tax month.
Use this checklist each tax month to ensure you meet all your CIS obligations as a contractor. Tick off each item as you complete it.
1. Before first payment to any new subcontractor
Verify with HMRC online to check registration status and deduction rate
2. Keep verification reference
Record the HMRC verification number for each subcontractor
3. Collect invoices
Gather all subcontractor invoices for the tax month
4. Check materials evidence
Verify receipts or invoices for materials the subcontractor has paid for directly
5. Calculate deductions correctly
Apply correct rate (0%, 20%, or 30%) to labour element only - exclude VAT and verified materials
6. Record all payments
Keep detailed records of gross amount, materials, deduction, and net payment
7. Submit CIS300 by the 19th
File your monthly return online by the 19th of the following month
8. Pay deductions by the 22nd
Pay CIS deductions to HMRC electronically by the 22nd (or 19th if paying by post)
9. Issue statements within 14 days
Give each subcontractor a Payment and Deduction Statement by the 19th
Common mistakes to avoid
Forgetting to verify - Always verify new subcontractors before the first payment. Unverified subcontractors attract the 30% rate.Wrong deduction base - Deduct from labour costs only, not the total invoice amount including materials and VAT.Missing nil returns - If you made no payments in a tax month, you must still submit a nil return or request an inactivity period.Late statements - Subcontractors need their statements to reclaim deductions. Issue them promptly.Wrong payment reference - Use your CIS payment reference (not PAYE reference) when paying deductions to HMRC.
Record keeping requirements
Keep all CIS records for at least 3 years after the end of the tax year they relate to. This includes:
Verification reference numbers from HMRC
Subcontractor invoices and payment records
Materials cost evidence
Copies of CIS300 returns submitted
Copies of Payment and Deduction Statements issued
Payment confirmations to HMRC
Use the Construction Industry Scheme online service (opens in a new tab)
Key dates summary
Day What happens 6th New tax month starts - verify any new subcontractors 5th Tax month ends - stop recording payments for this period 19th Return deadline - file CIS300 for previous tax month 19th Statement deadline - issue statements to all subcontractors 22nd Payment deadline - pay deductions to HMRC (electronic)
Verify subcontractors, file returns, and manage your CIS account with HMRC
Related guides
For detailed step-by-step instructions on each part of the CIS process:
Comprehensive guide with full workflow details, nil returns, software options, and efficiency tips
This journey covers monthly compliance for established contractors. If you are new to CIS, start with 'Getting started with CIS' to learn the registration process first.