As a contractor, you are required to file a CIS monthly return with HMRC. This must be filed within 14 days of the tax month end (all tax months end on the 5th) so the return must be filed by the 19th of the month.
In the CIS monthly return HMRC request all payments made to subcontractors in that month. The CIS monthly return will include all CIS subcontractors including 0%, 20% and 30% subcontractors.
HMRC will ask for the following information:
• Subcontractor name
• Verification number
• Gross amount
• Materials amount
• Tax deducted
If you have a month where you don’t use any subcontractors so no payments have been made, a Nil Return will need to be filed to HMRC.
If you do not file a monthly return to HMRC, you will be issued a CIS penalty of £100. This penalty will be ruled out if a Nil Return is filed.
If needed you are allowed to amend previously filed CIS monthly returns without any consequences however if they believe the return was filed intentionally incorrect they may investigate further.
When making CIS payments to HMRC they are either paid monthly or quarterly.
1. Monthly Payments They must be paid within 14 days of the tax month-end or 17 days if paying electronically. Typically if the contractor also has PAYE and NIC due, this will be paid over at the same time.
2. Quarterly Payments They must be paid within 14 days of the quarter-end or 17 days if paying electronically. The quarter ends are on 5th July, 5th October, 5th January and 5th April. Quarterly payments can only be made if the average monthly liability for CIS, PAYE and NIC is less than £1,500 per month.
When paying HMRC it is best to pay with a Business Debit Card (they charge a fee if you use a credit card so it would depend on your circumstances) as this will be the easiest option.
To pay using this method you will need your 13 digit Accounts Office Reference number, it will look something like this 123PA01234567.
If you need any support with your CIS activities, our team is on hand to provide any help and if needed our partners can handle the CIS responsibilities for you. For more information take a look at our CIS Resource Hub.
Frequently asked questions
This article has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the provided content.
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