CIS Returns: The Monthly Return for Contractors

A CIS return is the monthly report a contractor sends HMRC listing every subcontractor it paid in the tax month, what it paid them and what it deducted. It is due by the 19th of the following month, and since 6 April 2026 a contractor whose business includes construction operations, and that has paid subcontractors before, must still file one for a month in which it paid nobody — a nil return — unless it told HMRC in advance.

Only the paying side files it. A subcontractor never sends a CIS monthly return; the obligation sits with the contractor, and so does every penalty attached to it. That is also why the return is less a bookkeeping task than it looks. Each one carries a declaration about how you checked the subcontractors on it, and that declaration is only as good as your records.

What goes on the return

The contents are fixed by regulation 4 of the Income Tax (Construction Industry Scheme) Regulations 2005. For your own business: your name, your "unique taxpayer reference (UTR) and Accounts' Office reference", and the tax month the return covers. One caution if you click through: at the time of writing (October 2026), legislation.gov.uk's revised text of regulation 4 had not yet been updated for the 2015, 2016 and 2026 amendments. It still printed the old paragraph (4) and the nil-return paragraphs (10) and (11) that were omitted in 2015, and it did not show the new paragraphs (9A) and (9B), so where this guide relies on those paragraphs it quotes the amending regulations.

Then, for each subcontractor you paid that month, the return needs their name and National Insurance number or company registration number "if known", plus a set of figures that depends on their status:

• Registered for gross payment: their UTR and the total you paid them.
• Registered for payment under deduction: their UTR, the total paid, the amount within it you accept as the direct cost of materials, and the total deducted.
• Not registered: their UTR "if known", the total paid, the materials amount and the total deducted, plus "the verification reference for higher rate deduction" — the reference HMRC issues when it tells you to deduct at the higher rate.

GOV.UK sets the rates the deduction figure comes from: "20% for registered subcontractors", "30% for unregistered subcontractors", and "0% if the subcontractor has 'gross payment' status". Which rate applies to whom is what HMRC tells you when you verify — so the return is downstream of verification, not a separate exercise.

The three declarations you sign

This is the part that turns the return into a compliance document. Regulation 4(5) requires every return to "include a declaration by the person making the return":

1. "that none of the contracts to which the return relates is a contract of employment" — the employment status declaration. GOV.UK puts a number on getting it wrong: "You could get a penalty of up to £3,000 if you give the wrong employment status for a subcontractor on your monthly return."
2. "indicating whether he has complied with the requirements of regulation 6 (verification etc of registration status of sub-contractor) in the case of each person to whom a payment to which the return relates is made" — the verification declaration. One per subcontractor, every month.
3. That the return is "complete and accurate to the best of the contractor's knowledge and belief."

The second declaration is the one that ties the return to your subcontractor records. Regulation 6 is the verification duty, and it has a built-in exception: a contractor "need not verify if" the subcontractor "has been included in a return under regulation 4 in the current or previous two tax years". So whether you can tick the declaration honestly for a returning subcontractor depends on a fact most firms do not have to hand — the last month that subcontractor appeared on one of your returns. Our guide to verifying a subcontractor covers the check itself.

Deadlines: the tax month and the 19th

CIS runs on tax months, not calendar months. Regulation 4(1) requires the return "not later than 14 days after the end of every tax month". GOV.UK's worked example: "If you're making a return for the tax month of 6 May to 5 June, it must reach HMRC by 19 June."

Three dates fall out of each tax month, and they are easy to blur:

Returns go in electronically. Since SI 2016/348, regulation 4(4) has read: "The return must be transmitted to the Commissioners for Her Majesty's Revenue and Customs using an approved method of electronic communications", with narrow exceptions. GOV.UK names the routes: "the HMRC CIS online service" or "some commercial CIS software".

Nil returns: compulsory again from 6 April 2026

If you are an established contractor and you paid no subcontractors in a tax month, you now have to say so.

The nil-return duty was removed in 2015 and reinstated by the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2026, which "come into force on 6th April 2026". The new regulation 4(9A) applies to a contractor whose business includes construction operations, "who has previously made contract payments … but has made no such payments in a tax month", and requires it to "make a return under paragraph (1), indicating that no such payments were made, not later than 14 days after the end of the relevant tax month."

The way out is to tell HMRC first. Regulation 4(9B) switches the duty off if you notify HMRC "that they will make no payments under construction contracts for a tax month and the notification is made not later than 14 days before the start of the tax month to which the notification relates." GOV.UK's guidance describes an "inactivity request" for when you have "temporarily stopped using subcontractors", but does not link it to regulation 4(9B). It says an inactivity request "lasts for up to 6 months", that "You can renew it", and that "You can make an inactivity request when you file a nil return". It does not mention the 14-day advance deadline, so treat the regulation, not the GOV.UK page, as the test for whether a month is covered.

The timing matters. A quiet month you only notice after it has started cannot be covered by notification — the notice had to land 14 days before it began. In that case you file the nil return.

HMRC's reason for the change, from its policy paper: removing the obligation "did not reduce administrative burdens for contractors, or for HMRC, and resulted in erroneous late filing penalties." If your process was built between 2015 and 2026, it may assume a quiet month needs no action. It now does.

What a late return costs

GOV.UK's penalty schedule for late monthly returns:

Beyond that, GOV.UK says "you may be given an additional penalty of up to £3,000 or 100% of the CIS deductions on the return, whichever is higher." Each month's return is a separate filing with its own deadline, so a quiet spell nobody planned for can turn into several late returns at once. You can appeal "within 30 days of the date on the penalty notice", online or in writing — "You cannot appeal over the phone."

Separately, the records behind the returns carry their own penalty. GOV.UK requires you to keep the gross amount of each subcontractor invoice, the deductions made, and (where you deducted) the materials costs, "for at least 3 years after the end of the tax year they relate to", and warns: "You could be fined up to £3,000 if you cannot show your CIS records when asked by HMRC."

Getting a return right, month after month

The return is mechanical once the inputs are right. The errors come from the inputs:

1. Know who you paid, and under which status. Every subcontractor paid in the tax month, with the rate HMRC gave you at verification. HMRC must tell you if a subcontractor's registration changes (regulation 6(6), which applies where you included a payment to them on a return, or verified them, "in the current or previous two tax years"), and until it does you are "entitled to assume" that a subcontractor previously verified or notified as registered for gross payment or payment under deduction has not since ceased to be so registered (regulation 6(7)) — so the failure is a status-change notice that arrives and never reaches whoever prepares the return.
2. Keep the date each subcontractor last appeared on a return. That is what tells you whether regulation 6 needed a fresh verification — and what you are declaring every month.
3. Treat employment status as a per-person question, not a per-firm habit. A labour-only operative working under your direction is exactly where the employment declaration gets tested. Our guide to bona fide subcontractors covers the related insurance split.
4. Decide quiet months in advance. If a month with no subcontractor payments is foreseeable, notify HMRC at least 14 days before it starts. Otherwise diary the nil return.
5. File, then issue statements, then pay. All three run off the same figures and two of them share the 19th.

For the wider CIS picture — verification and what it returns — see our CIS verification guide. For the documents to collect from a subcontractor before the first payment, see subcontractor onboarding documents.

SubComply is being built to hold the subcontractor side of this — verification status and the date each subcontractor last appeared on a return, alongside insurance expiry and RAMS sign-off — so the monthly declaration is backed by a record rather than a memory. Join the waitlist to be notified when it launches.

Sources

• The Income Tax (Construction Industry Scheme) Regulations 2005 (SI 2005/2045), regulation 4 (monthly return) — at the time of writing (October 2026), the revised text there did not yet incorporate the 2015, 2016 and 2026 amendments
• The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2015 (SI 2015/429), regulation 2(2)
• The Income Tax (Construction Industry Scheme) Regulations 2005, regulation 6 (verification)
• The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2026 (SI 2026/289)
• The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2016 (SI 2016/348), regulation 2
• GOV.UK — What you must do as a CIS contractor: file your monthly returns
• GOV.UK — What you must do as a CIS contractor: make deductions and pay subcontractors
• GOV.UK — What you must do as a CIS contractor: pay deductions to HMRC
• GOV.UK — What you must do as a CIS contractor: record keeping
• GOV.UK — What you must do as a CIS contractor: tell HMRC about changes
• HMRC policy paper — Simplification and administrative improvements to the Construction Industry Scheme

This guide summarises the published CIS regulations and HMRC guidance for contractors. It is not tax advice — check your own position with HMRC's CIS helpline or a qualified accountant, particularly for penalty appeals and employment-status questions.

Last reviewed: 11 November 2026