Contractors who operate under the Construction Industry Scheme have strict criteria to adhere to. This includes providing a monthly return to HM Revenue & Customs with details of all subcontractor payments made during that month.
For construction industry purposes, a month runs from the 6th of one month and ends on the 5th of the following month. The CIS monthly return is a CIS300 and should be completed even if you haven’t made any payments to subcontractors that month.
As a contractor, you will need to retain details of the gross amounts of subcontractor payments, excluding VAT. You will also need to keep details of any deductions made before paying a subcontractor. These records should be kept for a minimum of three years after the relevant tax year. It is possible to submit monthly CIS returns either electronically or using a paper CIS monthly return. Once a contractor has registered with HMRC, a contractor pack will be sent. A blank copy of CIS300 is included in the pack for completion, but HMRC will send out a new return towards the end of each month. Filing electronically requires software which is compatible with HMRC systems, or it is possible for large contractors to use Electronic Data Interchange.
It is essential to submit the monthly return in a timely manner each month to avoid large penalties. The CIS monthly return has to be received no later than 14 days after the end of each month. For instance, a return for the month which covers 6th June to 5th July should reach HMRC no later than the 19th July.
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