A CIS contractor must send HMRC a monthly return (the CIS300) by the 19th of each month, covering every payment made to subcontractors in the tax month that ended on the 5th. From 6 April 2026 a mainstream contractor that paid nobody must file a nil return unless it told HMRC in advance that it would make no payments. A late return triggers an automatic £100 penalty the day after the deadline, with further fixed and tax geared penalties at 2, 6 and 12 months.

When is the CIS300 monthly return due?

The return covers a tax month, which runs from the 6th of one month to the 5th of the next. Regulation 4 of the Income Tax (Construction Industry Scheme) Regulations 2005 (SI 2005/2045) requires it to reach HMRC no later than 14 days after the end of that tax month, which is the 19th. GOV.UK gives the example of the tax month 6 May to 5 June, where the return must reach HMRC by 19 June. In the current tax year, the return for the month ending 5 November 2026 is due by 19 November 2026.

Returns must be filed online. HMRC’s Construction Industry Scheme Reform Manual (CISR61030) records that online filing became mandatory from 6 April 2016. GOV.UK lists two routes: the HMRC CIS online service or commercial CIS software.

What has to go on the return?

The return must list every subcontractor paid in the tax month for construction work, whether they were paid gross, under the standard deduction or under the higher deduction (CISR12170). For each one it shows the gross payment, the direct cost of materials where a deduction was made and the amount deducted. The rules on which work counts are covered in what counts as construction work for CIS.

The return also carries declarations. Under regulation 4 the contractor declares that none of the contracts is a contract of employment, states whether it has verified each subcontractor, and confirms the return is complete and accurate to the best of its knowledge. GOV.UK warns that a contractor could get a penalty of up to £3,000 for giving the wrong employment status for a subcontractor. Where commercial software is used, the return must not contain negative values; any entry below zero should be entered as 0, and HMRC may later ask for details of the entries replaced.

What if no subcontractors were paid in the month?

This is the rule that changed most recently. The requirement to file nil returns was removed in 2015, but HMRC’s policy paper on simplifying CIS administration explains that this led to erroneous late filing penalties and significant penalty debt that was often not due. The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2026 (SI 2026/289) inserted regulation 4(9A) and (9B), in force from 6 April 2026.

  • Nil return. A mainstream contractor that has previously made contract payments but made none in a tax month must make a return saying so, no later than 14 days after the end of that month.
  • Advance notice instead. The nil return is not needed if the contractor notified HMRC that it would make no payments for that tax month, and the notification was made no later than 14 days before the tax month starts.
  • Inactivity. A contractor expecting no payments for a while can ask HMRC to treat the scheme as inactive. GOV.UK says this can cover up to 6 months, during which HMRC will not send returns. CISR67010 confirms that once inactivity is set, there is no obligation to make nil returns for the months covered, and a period can be extended.

Paying a subcontractor during an inactive period is not a breach in itself. The CIS 340 guide says the contractor files a return as normal, which automatically lifts the inactivity, and can tick the box on that return to set a further period of up to 6 months. Deemed contractors, the businesses brought into CIS by their construction spending (see deemed contractors under CIS), are not legally required to file nil returns, but CIS 340 says HMRC will still issue a penalty if they tell it nothing, and will cancel it once told no subcontractors were paid.

What are the late filing penalties?

Penalties are charged under Schedule 55 to the Finance Act 2009, where CIS returns are item 6 in the table at paragraph 1. The penalty date is the day after the filing date. For behaviour that is not deliberate, the amounts are:

Return still outstanding Penalty Schedule 55
On the penalty date (day after the 19th) £100 Paragraph 8
2 months after the penalty date £200 Paragraph 9
6 months after the penalty date Greater of £300 or 5% of the deductions on the return Paragraph 10
12 months after the penalty date Greater of £300 or 5% of the deductions on the return Paragraph 11(5)

At 12 months the penalty is higher where the contractor deliberately withheld information: the greater of 70% of the deductions or £1,500 if deliberate but not concealed, and the greater of 100% or £3,000 if deliberate and concealed (paragraph 11(3) and (4)). The penalties apply per return, not per subcontractor, so a run of missed months multiplies quickly.

There is relief for a contractor that has never filed a CIS300. Paragraph 13 caps the total of the £100 and £200 fixed penalties at £3,000 for returns up to the first one filed, and removes the £300 minimum from the tax geared penalties. CISR65080 explains that the cap applies only to new contractors and only until their first return is filed. The penalty position across other taxes is summarised in the HMRC penalties table.

How does that work in figures?

Illustration only. An established contractor does not file the return for the tax month ending 5 November 2026, which shows deductions of £4,000. The return was due by 19 November 2026.

  1. 20 November 2026: first fixed penalty of £100.
  2. Still outstanding 2 months after the penalty date: second fixed penalty of £200.
  3. Still outstanding 6 months after: 5% of £4,000 is £200, so the £300 minimum applies.
  4. Still outstanding 12 months after: a further £300, assuming nothing was deliberately withheld.

The total is £900 for one return. Had the return shown deductions of £10,000, each tax geared penalty would be £500 and the total £1,300.

Can a CIS late filing penalty be appealed?

Yes. GOV.UK says an appeal must be made within 30 days of the date on the penalty notice, either through HMRC’s online service or in writing quoting the Unique Taxpayer Reference and the payment reference. Appeals cannot be made by phone. CISR65100 adds that the appeal must state its grounds.

Paragraph 23 of Schedule 55 removes liability where there is a reasonable excuse, but an insufficiency of funds is not one unless caused by events outside the contractor’s control, and relying on someone else (a bookkeeper or payroll bureau, for example) is not one unless the contractor took reasonable care. See reasonable excuse explained.

Two points from HMRC’s own guidance help contractors who use subcontractors only occasionally. CISR61280 says a person who normally works alone and engages subcontractors only for an unusually large or specialist job may stop being a person who makes payments under construction contracts once that work ends, following two First tier Tribunal decisions (Bushell and Koleychuk). CISR65190 says that where an appeal reveals a long run of consecutive months with no payments, penalties for that period may be reduced to nil. Neither replaces the safer course of filing nil returns or notifying inactivity.

How do you correct a return already filed?

GOV.UK says corrections are made through the HMRC CIS online service. The CIS 340 guide adds that a return sent with commercial software cannot be amended using HMRC’s software, so the correction must come through the software supplier, and that out of date returns are corrected by writing to HMRC. HMRC says it will not automatically look for penalties for mistakes and usually acts only where an error or omission was caused by negligence or intent. Omissions, wrong figures and incorrect declarations all make a return incorrect.

How do returns fit with paying HMRC and giving statements?

The return is one of three monthly jobs. Deductions must be paid to HMRC by the 22nd if paid electronically, or the 19th if paying by post. CIS 340 allows quarterly payment where average monthly payments to HMRC are below £1,500, but returns must still be filed monthly. Subcontractors who suffered a deduction must receive a statement by the 19th, covered in CIS payment and deduction statements.

Late returns also carry a hidden cost. CIS 340 says that if a contractor fails to operate the scheme correctly, HMRC may cancel the contractor’s own gross payment status where it also works as a subcontractor; the compliance test is explained in CIS gross payment status. The scheme as a whole is outlined in the Construction Industry Scheme explained.

What mistakes come up most often?

  • Assuming no return is needed in a quiet month. Since 6 April 2026 a nil return is required unless HMRC was told at least 14 days before the month began.
  • Leaving off subcontractors paid gross. Every subcontractor paid for construction work goes on the return.
  • Filing a correction through HMRC’s service when the original went in through software, or the reverse.
  • Treating a payroll bureau’s failure as an automatic excuse.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.