If you work in the construction industry as a contractor, you’ve likely already heard of a CIS Return. If not, it’s something you’ll want to get familiar with ASAP! 

The Construction Industry Scheme (CIS) is the method HMRC uses to make sure the correct amount of tax is paid on subcontractor work, and your monthly CIS Return is how you tell them what’s been paid and deducted. 

Let’s make filing your CIS return simple

We realise the words “monthly tax return” are never going to light up your being with a sense of excitement, but whether you love it or hate it, you still need to complete a CIS return.  

So we’ll explain how to file your CIS return step-by-step, making it as easy as possible. So you can stay compliant, avoid penalties, and get back to running your business

What is a CIS Return?

The Construction Industry Scheme (CIS) is HMRC’s system for making sure tax is collected correctly from subcontractors working in construction. If you’re a contractor, you’re required to submit a CIS Return every month to report:

• how much you’ve paid your subcontractors, and
  
• how much tax you’ve deducted from those payments.
  

It’s like a  monthly ‘’report card" for HMRC, showing them who you’ve paid and confirming you’ve made the right tax deductions. 

A CIS Return isn’t optional, it’s a legal requirement if you fall under the scheme. You’ll need to file it even if you haven’t paid any subcontractors in a given month (this is called a ‘nil return’).

A bit of background on CIS

Before the Construction Industry Scheme was introduced, keeping track of subcontractor payments was messy, with underpaid tax and cash-flow headaches for HMRC and businesses alike.

CIS streamlined the process, making it easier for contractors to deduct the right tax at source and giving subcontractors credit for it. Helping reduce a mountain of tax disputes and improving payment transparency across the industry.

With well over 1 million people now registered on the scheme, you can see why HMRC wanted to implement it. In recent years though, CIS has come in for criticism from construction unions.

Who needs to file?

• Contractors – including sole traders, partnerships, and limited companies who hire subcontractors for construction work.
  
• Deemed contractors – businesses whose average annual spend on construction is above £3 million in the 12 months since your first payment. Even if construction isn’t their main activity.

Filing your CIS Return on time and accurately, keeps you compliant and makes the tax process smoother for everyone involved.

When do you need to submit a CIS Return?

CIS Returns run on a monthly cycle. The deadline is always the 19th of the month following the tax month you’re reporting on.

For example:

• Payments you make to subcontractors between 1 July and 31 July must be reported by 19 August.
  

If you miss the deadline, and HMRC can issue penalties — and the longer it takes you to submit, the bigger the fine can get. Even if you didn’t pay any subcontractors that month, you’ll still need to submit a nil return by the same deadline.

How to file your monthly CIS Return

The process of filing your CIS Return consists of 6 steps outlined below:

1. Gather your subcontractor details‍

Names, Unique Taxpayer Reference (UTR), and payment amounts for the month.

2. Verify your subcontractors‍

Check their CIS status with HMRC (gross payment, standard 20% deduction, or higher 30% deduction for unverified subcontractors).

3. Calculate tax deductions‍

Work out how much tax you need to deduct based on each subcontractor’s status.

4. Complete your CIS Return

You can do this through:

• HMRC’s CIS online service
  
  
• HMRC-approved accounting software
  
  
• Or let your accountant (like Crunch!) handle it all for you
  

5. Submit by the 19th deadline‍

Always hit the monthly cut-off to avoid penalties.

6. Give subcontractors their payment and deduction statements‍

They’ll need these for their own tax records.

*Crunch Pro Tip:

If this process is making your eyes glaze over, Crunch can take care of it for you so you can spend your time actually running your business (or enjoying a well-earned break).

How Crunch’s CIS experts can save you bags of time and money

Having dealt with 1000s of construction accounting clients, who have come to us for help, we’ve seen some very common *and costly* errors crop up time and again when we look at the CIS returns they were previously filing themselves. 

These include:

• Missing the deadline – even a single day late can trigger a penalty.
  
  
• Incorrect subcontractor details – wrong UTR or payment figures will cause headaches later.
  
  
• Forgetting nil returns – you must file even if you didn’t pay any subcontractors that month.
  
  
• Poor record-keeping – without accurate records, your return can quickly go off track. We'd always recommend checking out our guide on managing expenses to make sure you can make the most of every penny.
  
  

The easiest way to dodge all of these is to let someone else take care of it for you.

At Crunch, we can:

• Verify your subcontractors with HMRC.
  
  
• Calculate and process deductions correctly. If you're not sure how to claim a CIS deduction refund, then be sure to check out our expert guides.
  
  
• File your monthly CIS Return on time, every time.
  
  
• Keep all your records neat and ready for HMRC.
  
  

That means fewer admin headaches, no penalty worries, and more time for you to focus on running your business. 

A CIS Return is a legal requirement if you’re a contractor, but it needn’t be a monthly stress-fest. Get in touch with Crunch today and we’ll make the whole process painless, predictable, and penalty-free.

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