One of the main CIS contractor obligations is filing your monthly returns.
You must inform HM Revenue and Customs (HMRC) each month about any payments made to subcontractors using your monthly return.
There are several ways to file Construction Industry Scheme (CIS) returns You can use (either):
- The free HMRC CIS online service.
- Recognised software suppliers for the CIS scheme.
Returns have a declaration that listed subcontractors are not ‘employees‘.
Note: Giving the wrong employment status for a subcontractor on a monthly return can result in a penalty of up to £3,000.
There is no need to file a CIS return for months when you do not make a payment to any subcontractors. Even so, you would still need to tell HM Revenue and Customs that no return is due.
Using Commercial CIS software
If you are using commercial CIS software to file a return, it cannot not have any negative values. Thus, entries with an outcome of less than zero ‘0’ must be entered as zero ‘0’ instead.
It would not be uncommon for HM Revenue and Customs to ask you to give details of any entries you replaced, even at a later date.
Deadline CIS Monthly Returns
HM Revenue and Customs need to receive your monthly returns no later than the 19th of every month following the previous tax month.
An Example:
Suppose you make a return for the tax month of 6th of May to the 5th of June. In this example, your CIS return must reach HMRC by the 19th of June.
CIS Penalties for Late Returns
There are deadlines for filing returns. As a CIS contractor, you will get a penalty for missing the deadline. Even so, HMRC will cancel penalty if you inform them that you did not pay any subcontractors for that tax month.
- Filing a return one (1) day late: Penalty is £100
- Filing a return two (2) months late: Penalty is £200
- Filing a return six (6) months late: Penalty is the higher of £300 or 5% of the CIS deductions on the return
- Filing a return twelve (12) months late: Penalty is the higher of £300 or 5% of the CIS deductions on the return
A different section explain how to pay Construction Industry Scheme (CIS) late filing penalty.
Note: Even later returns can result in an additional penalty of the higher amount of £3,000 or 100% of the CIS deductions on the return.
Disagreeing with a CIS Late Filing Penalty
If you disagree with a late filing penalty you can make an appeal within thirty (30) days of the date stamped on the penalty notice, by:
- Appealing through the HMRC online service.
- Writing to HMRC (remember to quote your Unique Taxpayer Reference (UTR) and payment reference shown on the notice).
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Correcting Errors on CIS Returns
There is a set process for correcting or changing returns. You should use the HMRC CIS online service to change or to correct an error on a return. You can contact the CIS helpline if you need further help making corrections or changes.
ALSO IN THIS SECTION
CIS Deductions and Payments | How to make subtractions and pay subcontractors for construction work.
CIS Record Keeping | A list of records you must keep under the Construction Industry Scheme (CIS).