CIS Monthly Return & How to File with HMRC - Deadline

If you are a contractor or subcontractor in the construction industry, understanding the CIS monthly return is essential. The Construction Industry Scheme (CIS) is a part of managing tax within the UK construction sector.

The CIS monthly return is a required report submitted by contractors detailing payments made to subcontractors and the tax deducted. This ensures transparency, correct tax payments, and helps HMRC oversee the construction industry effectively.

In this blog, we will break down everything you need to know about the CIS monthly return, including filing deadlines, penalties for late returns, and how to make payments to HMRC smoothly and on time.

What is a CIS Return?

A CIS return is a monthly report that contractors must submit to HMRC. It details all payments made to subcontractors during the previous tax month. This helps HMRC track payments and tax deductions in the construction industry.

Who Needs to File a CIS Monthly Return?

Any business or individual registered as a contractor under the Construction Industry Scheme (CIS) must file a CIS monthly return with HMRC. This includes companies, partnerships, and sole traders who pay subcontractors for construction work.

Subcontractors themselves do not file the CIS returns; only contractors have this responsibility. If you hire subcontractors and make payments subject to CIS deductions, you are required to register with HMRC CIS and submit these returns each month.

Filing timely and accurate monthly CIS returns is essential to comply with UK tax law and to avoid penalties. It also ensures subcontractors receive the correct tax credits and payments from HMRC.

What Information Does a CIS Return Include?

The HMRC CIS return includes:

• The total amount paid to each subcontractor
• The deductions made for tax purposes
• Subcontractor details and payment dates

Filing accurate returns avoids penalties and ensures subcontractors receive the correct payments.

When is the CIS Return Deadline?

The deadline for filing CIS tax returns is the 19th of every month, following the end of the previous tax month. While the general deadline for other tax returns is 31st January, contractors paying subcontractors must submit their CIS returns to HMRC by the 19th of each month to stay compliant. Missing the CIS return deadline can lead to fines from HMRC.

Penalties for Late Returns

You’ll get a penalty if you miss the deadline for filing returns. HMRC’s penalty notice will issue the following penalties for late returns.

For even later returns than the timeframes above, HMRC may issue an additional penalty of up to £3,000 or 100% of the CIS deductions on the return, whichever is higher.

Making CIS Payments to HMRC

Along with the submission of CIS returns, contractors must also ensure that the deducted tax from subcontractors is paid to HMRC CIS promptly. These payments cover the tax deducted at source from subcontractor invoices under the scheme.

Contractors can pay CIS deductions using various methods, including online bank transfers, Direct Debit, or via HMRC’s online payment services.

When and How to Pay CIS Payments

CIS payments must be paid to HMRC by the 22nd of each month if you pay electronically, or by the 19th if paying by cheque or other manual methods. This deadline follows the month in which the deductions were made from subcontractor payments.

To pay CIS payments with:

• Online banking or faster payments can be used.
• Payments via Direct Debit are set up through HMRC.
• Payments through the HMRC online portal or by telephone bank.

Always ensure your CIS payments reach HMRC on time to avoid interest and penalties.

Conclusion

Filing your CIS monthly return and meeting your tax obligations is an essential responsibility for any contractor working with subcontractors. Missing the CIS return deadline can lead to penalty notices from HMRC CIS, so it’s important to file your returns on time. Your HMRC CIS return should accurately reflect the tax deducted and confirm that your subcontractors are self-employed, not employees.

If you need guidance or support with your cis return or any other aspect of CIS compliance, feel free to contact dns on 03330603321 or email us at [email protected].

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About the author

Gary Zouvani
I am a qualified chartered management accountant with over 25 years’ experience working in industry and accountancy practise. Currently DNS group operations director I manage over 50 employees as well as head up our accountancy franchise proposition.