CIS Late Filing Penalties and How to Avoid Them

The Cost of Filing Late

CIS monthly returns are due by the 19th of the month following the CIS tax month (which runs from the 6th to the 5th). Miss this deadline — even by a single day — and you face an automatic £100 penalty. No warnings, no grace period.

For contractors who file multiple returns throughout the year, late filing penalties can accumulate rapidly.

The Penalty Structure

| Period | Penalty | |--------|---------| | 1 day late | £100 | | 2 months late | Additional £200 | | 6 months late | Additional £300 or 5% of CIS deductions (whichever is greater) | | 12 months late | Additional £300 or 5% of CIS deductions (whichever is greater) |

Worked Example

A contractor with £5,000 in monthly CIS deductions who files 7 months late:

• 1 day late: £100
• 2 months late: +£200
• 6 months late: +£300 (since 5% of £5,000 = £250, which is less than £300)
• Total: £600

If the same contractor misses three consecutive returns by 6 months each, the total penalties would be £1,800.

Nil Returns Are Not Exempt

This catches many contractors. If you had no subcontractor payments during a CIS month, you still must file a nil return. The penalty for a late nil return is identical to a late standard return — £100 for the first day, escalating from there.

Why Returns Are Filed Late

Forgetting the Deadline

CIS tax months do not align with calendar months. The month runs from the 6th to the 5th, with the return due by the 19th. This unusual timing catches people out, particularly during busy periods.

Incomplete Records

If your records are not up to date, you may not have the information needed to complete the return. Waiting until the records are sorted can push you past the deadline.

Relying on Someone Else

If your accountant or bookkeeper submits returns on your behalf, miscommunication can lead to missed deadlines. Ultimately, the contractor is responsible — not the agent.

System Issues

Occasionally, HMRC's online service is unavailable. While this can be a reasonable excuse for a very short delay, it does not excuse habitual lateness.

How to Avoid Late Filing

1. Set Up Recurring Reminders

Put the 19th of every month in your calendar with a reminder a week before. This gives you time to prepare the data and submit before the deadline.

2. Keep Records Up to Date

Record CIS payments as they happen, not at the end of the month. If every payment is already in your system, compiling the return takes minutes rather than hours.

3. Set Up Nil Return Alerts

If you know you will not have any subcontractor payments in a given month, submit the nil return early. Do not wait until the 19th — submit it on the 6th when the new CIS month starts.

4. Use Accounting Software

Software that tracks CIS payments and deadlines significantly reduces the risk of late filing. Automated reminders and pre-populated return data make the process faster and more reliable.

5. Have a Backup Plan

If your usual person is unavailable (holiday, illness), ensure someone else can submit the return. The deadline does not move because your bookkeeper is on leave.

Appealing a Penalty

If you receive a late filing penalty, you can appeal within 30 days. Grounds for appeal include:

• Reasonable excuse — an unexpected event beyond your control (serious illness, bereavement, fire, flood, HMRC system outage)
• HMRC error — the return was submitted on time but not recorded correctly

What is not a reasonable excuse:

• Being too busy
• Forgetting
• Relying on someone else who let you down
• Not knowing about the obligation

If HMRC accepts your appeal, the penalty is cancelled. If they reject it, you can escalate to the First-tier Tax Tribunal.

The Domino Effect

Late CIS returns can have knock-on effects:

• Subcontractors' refunds — if your return is late, HMRC may not have records of the deductions you made, delaying your subcontractors' refund claims
• Gross Payment Status — if you are also a subcontractor, late CIS returns as a contractor can affect your GPS compliance test
• HMRC scrutiny — repeated late filing flags you for closer examination

How Accounted Prevents Late Filing

Accounted is built to keep you compliant:

• Smart deadline reminders — Penny alerts you well before the 19th
• Payment tracking — CIS payments recorded as they happen
• Return data preparation — figures ready to submit with minimal effort
• Nil return prompts — if no payments were made, Penny reminds you to file a nil return

See our pricing to choose a plan that fits.

---

A £100 penalty is entirely avoidable. Sign up for Accounted and let Penny make sure every CIS return is filed on time, every month.