CIS Monthly Returns: How to Complete and Submit to HMRC

If you are a contractor in the Construction Industry Scheme, you must submit a monthly return to HMRC for every tax month in which you made payments to subcontractors. The return reports the payments made, deductions applied, and verification status of each subcontractor. Late or incorrect returns trigger automatic penalties, so getting this process right is essential.

What Is a CIS Monthly Return?

A CIS monthly return is a report submitted to HMRC listing all payments made to subcontractors during a tax month (6th of one month to 5th of the next). It shows the gross amount paid, the deductions applied, and the cost of materials for each subcontractor.

• Covers one tax month (e.g., 6 March to 5 April)
• Lists every subcontractor paid during that period
• Shows gross payment, deductions, and materials cost for each
• Must be submitted even if no payments were made (nil return)
• Submitted online through HMRC's CIS system

When Are Returns Due?

CIS monthly returns must be submitted to HMRC by the 19th of the month following the tax month. For example, a return covering 6 March to 5 April must be submitted by 19 April. Late submissions trigger automatic penalties.

• Due date: 19th of the following month
• Example: payments from 6 Feb to 5 Mar → return due by 19 Mar
• Must be submitted online (paper returns are not accepted)
• A nil return must be filed if no payments were made
• Late filing triggers automatic penalties starting at £100

What Information Is Needed?

For each subcontractor paid during the period, you need to report their details and the payment breakdown. Having accurate, up-to-date records throughout the month makes the return straightforward.

• Subcontractor name and UTR
• Verification number from HMRC
• Gross payment amount (before deductions)
• Amount of CIS deductions applied
• Cost of materials (excluded from deductions)
• Whether the subcontractor has gross payment status

How to Submit the Return

CIS monthly returns are submitted electronically through HMRC's online services or through compatible payroll/CIS software. You cannot submit paper returns. You will need your Government Gateway credentials to access the service.

• Log in to HMRC online services with your Government Gateway account
• Navigate to the CIS section and select the return period
• Enter details for each subcontractor paid during the period
• Review the total deductions and confirm the return is correct
• Submit the return and save the confirmation for your records
• CIS software can submit returns directly via HMRC's API

Penalties for Late or Incorrect Returns

HMRC charges automatic penalties for late CIS returns. The penalties escalate the longer the return remains outstanding. Incorrect returns can also trigger penalties and interest charges.

• 1 day late: £100 penalty
• 2 months late: additional £200 penalty
• 6 months late: additional penalty of £300 or 5% of the CIS deductions (whichever is higher)
• 12 months late: additional penalty of £300 or 5% of the CIS deductions (whichever is higher)
• Incorrect returns: penalties based on the amount of tax understated
• Interest charges on late payments of deductions to HMRC

Common Mistakes to Avoid

Most CIS return problems are caused by poor record-keeping during the month. If you track payments, deductions, and materials accurately as you go, the return is straightforward.

• Forgetting to file a nil return when no payments were made
• Using the wrong deduction rate (not re-verifying after status changes)
• Including VAT in the gross payment figure (VAT should be excluded)
• Failing to separate materials costs from labour costs
• Not keeping records of verification results
• Missing the 19th deadline due to poor diary management