If you’re a contractor in the Construction Industry Scheme (CIS), you have to send HMRC a monthly return — form CIS300 — showing what you paid subcontractors and what tax you deducted. It’s due by the 19th of every month.
The rules changed on 6 April 2026. Nil returns are mandatory again, and HMRC has brought back the full late filing penalty regime. A contractor who skipped returns in quiet months under the old rules can now build up penalties quickly. This guide explains what goes on the return, how to file it, and how to stay out of trouble.
Who has to file a CIS return?
You must file monthly CIS returns if you’re registered as a contractor under CIS. That includes construction businesses that pay subcontractors, and some non-construction businesses that spend heavily on construction work (“deemed contractors”).
If you’re only a subcontractor, you don’t file CIS returns — your contractor does. Subcontractors claim their deductions back instead, through Self Assessment or, for limited companies, through payroll.
CIS tax months and deadlines
CIS tax months run from the 6th of one month to the 5th of the next. The return for each tax month is due by the 19th. For example, the return for 6 October to 5 November is due by 19 November.
The deductions you’ve made must also be paid to HMRC — usually alongside your PAYE, by the 22nd if you pay electronically.
Nil returns are back from April 2026
Between 2015 and April 2026, contractors didn’t have to file a return in months they paid no subcontractors. Many forgot to tell HMRC, and got penalties anyway. From 6 April 2026, the law changed. In any month you don’t pay subcontractors, you must either:
- File a nil return by the 19th, or
- Tell HMRC in advance that your scheme will be inactive, for up to six months at a time
The inactivity request must be made before the quiet period, not after. If you start paying subcontractors again during an inactive period, normal monthly returns start again straight away.
What goes on a CIS300 return
For each subcontractor you paid in the tax month, you’ll report:
- Their name and Unique Taxpayer Reference (UTR)
- The verification number, if they were verified at the higher 30% rate
- The gross amount paid, excluding VAT
- The cost of materials they supplied — no deduction is taken on materials
- The amount deducted (0%, 20% or 30%)
You’ll also confirm two declarations: that the subcontractors aren’t actually employees, and that you’ve verified any new subcontractors with HMRC.
How to file your CIS return: step by step
- Verify new subcontractors with HMRC before you pay them. HMRC tells you the deduction rate to use.
- Record every payment through the tax month, splitting labour from materials on each invoice.
- Calculate the deductions at each subcontractor’s verified rate. Deductions apply to labour only.
- File the return through HMRC’s CIS online service or CIS-compatible payroll or accounting software, by the 19th.
- Pay the deductions to HMRC with your PAYE payment.
- Send each subcontractor a payment and deduction statement within 14 days of the end of the tax month. They need it to claim the deduction back.
CIS late filing penalties
HMRC has restored the full penalty regime with the return of nil returns. Penalties apply per return, including nil returns:
- 1 day late: £100
- 2 months late: a further £200
- 6 months late: the greater of £300 or 5% of the CIS deductions on the return
- 12 months late: a further £300 or 5%, and potentially more depending on why the return was late
Miss six quiet months in a row and that’s six separate £100 penalties before any escalation. Late returns can also count against you if you hold, or want, gross payment status.
Common CIS return mistakes
- Taking a deduction on materials or VAT
- Paying a new subcontractor before verifying them
- Forgetting the nil return in a quiet month
- Making an inactivity request after the month has already started
- Not sending payment and deduction statements on time
One more April 2026 change
Since 6 April 2026, payments to local authorities and certain public bodies are exempt from CIS. If you work for these bodies, check your contracts — the rules on what’s in scope have changed.
Let us run your CIS returns
SmartFiling’s ICAEW chartered accountants file monthly CIS returns, nil returns and inactivity requests, verify subcontractors and issue statements for a fixed fee. See our CIS Returns service or get a free quote — we’ll reply within one working day.
Frequently asked questions
Do I need to file a CIS return if I paid no subcontractors?
Yes, from 6 April 2026 — unless you told HMRC in advance that your scheme would be inactive.
Can I correct a CIS return after filing?
Yes. You can amend a submitted return through HMRC’s CIS online service or your software.
What if a subcontractor can’t be verified?
HMRC will give you a verification number and you must deduct at the higher 30% rate.
