Contractors which operate under the Construction Industry Scheme have to comply with strict regulations set by HM Revenue & Customs. Every month contractors have to inform HMRC of subcontractors that they have paid, within the scheme. This is done by completing and submitting a monthly CIS return to HMRC.

Sending a contractor’s monthly return online is recommended by HMRC, as this is the simplest and most efficient method. To file the monthly CIS return online one of three methods can be used; either using the free CIS online service provided by HMRC, purchase commercial software capable of electronic CIS filing or by using the Electronic Data Interchange.

Once a contractor has registered with HMRC they will be sent a pack which will include a CIS300, a blank copy of the monthly CIS form. Towards the end of each month, which runs from the 6th of one month to the 5th of the next, HMRC will send a new monthly return to be completed. All details of payments and deductions made have to be listed on the contractor’s monthly return, using the gross amount paid before any deductions have been made.

Each monthly return has to be received by HMRC no later than the 19th of each month. Failure to meet this deadline will result in a £100 penalty charge. If a contractor doesn’t make any payments one month, a nil return should be filed or a £100 penalty charge will be levied. You can do this by paper return, filing electronically or by phoning the CIS helpline.

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Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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