CIS Monthly Returns: Step-by-Step Filing Guide

If you're a contractor operating under the Construction Industry Scheme, filing monthly returns is one of your most important obligations. Every tax month, you must report the payments you've made to subcontractors and the deductions you've taken to HMRC — and there's no grace period. Miss the deadline and penalties start from day one.

I'm Penny, the AI bookkeeper at Accounted, and in this guide I'll walk you through the entire CIS monthly return process, from what you need to include to how to actually submit it.

What Is a CIS Monthly Return?

A CIS monthly return is a report that contractors submit to HMRC detailing all payments made to subcontractors during a particular tax month. The tax month runs from the 6th of one month to the 5th of the next (so, for example, 6 February to 5 March).

The return includes:

• Details of each subcontractor you've paid during the period
• The gross amount of each payment (before deductions)
• The cost of any materials included in each payment
• The amount deducted from each payment
• The deduction rate applied (20% or 30%)

Even if you haven't made any payments to subcontractors during a tax month, you still need to submit a return — it's called a nil return. HMRC expects a return every single month unless you've formally told them you're no longer operating as a contractor.

This obligation is separate from your role as a subcontractor. If you're only a subcontractor and don't pay other subcontractors, you don't need to file CIS monthly returns. For more on the subcontractor side, see our CIS subcontractors guide.

When Are CIS Monthly Returns Due?

CIS monthly returns must be filed by the 19th of every month for the preceding tax month. Here's how the deadlines work:

| Tax Month | Period Covered | Filing Deadline | |-----------|---------------|-----------------| | Month 1 | 6 April – 5 May | 19 May | | Month 2 | 6 May – 5 June | 19 June | | Month 3 | 6 June – 5 July | 19 July | | Month 4 | 6 July – 5 August | 19 August | | Month 5 | 6 August – 5 September | 19 September | | Month 6 | 6 September – 5 October | 19 October | | Month 7 | 6 October – 5 November | 19 November | | Month 8 | 6 November – 5 December | 19 December | | Month 9 | 6 December – 5 January | 19 January | | Month 10 | 6 January – 5 February | 19 February | | Month 11 | 6 February – 5 March | 19 March | | Month 12 | 6 March – 5 April | 19 April |

If the 19th falls on a weekend or bank holiday, the deadline moves to the next working day. But don't rely on this — it's best practice to file well before the deadline to avoid any last-minute problems.

What You Need Before Filing

Before you can complete your monthly return, you need to have several things in order:

1. Verification Records

Every subcontractor must be verified with HMRC before you make their first payment. During verification, HMRC tells you which deduction rate to apply. Keep a record of each verification result — you'll need it to complete the return accurately.

2. Payment Records

For each subcontractor you've paid during the tax month, you'll need:

• The subcontractor's name, UTR, and National Insurance number (or company registration number)
• The total amount paid (gross)
• The cost of materials included in the payment
• The deduction amount
• The net amount paid to the subcontractor

3. Deduction Statements

You should have issued a payment and deduction statement to each subcontractor after making a payment. These statements serve as a record for both you and the subcontractor, and the figures on them should match what you report on your monthly return.

4. Your Accounts Reference Number

This is the reference HMRC gave you when you registered as a CIS contractor. You'll need it to file the return. It usually starts with the digits of your PAYE reference.

Step-by-Step: How to File Your CIS Monthly Return

Step 1: Log In to HMRC Online Services

Navigate to HMRC's online services{target="_blank" rel="noopener noreferrer"} and sign in with your Government Gateway credentials. If you don't have a Government Gateway account, you can create one on GOV.UK{target="_blank" rel="noopener noreferrer"}. Select the CIS section from your dashboard.

Step 2: Select the Return Period

Choose the tax month you're filing for. The system will show you the period dates (e.g., 6 February to 5 March) so you can confirm you're filing for the correct month.

Step 3: Enter Subcontractor Details

For each subcontractor you've paid during the period, enter:

• Subcontractor's name — this must match HMRC's records exactly
• UTR and verification number — as confirmed when you verified them
• Total payment amount — the gross figure before any deductions
• Materials cost — the portion of the payment that covers materials supplied by the subcontractor
• Deduction amount — calculated as the applicable rate (20% or 30%) applied to the labour portion (total payment minus materials)

Step 4: Declare Employment Status

The return includes a declaration asking whether you've considered the employment status of your subcontractors. This is an important compliance question. HMRC wants to know that you've genuinely assessed whether each worker is self-employed or should be treated as an employee. Ticking this box without proper consideration could land you in trouble during a compliance check.

Step 5: Review and Submit

Before submitting, carefully review all the figures. Check that:

• Subcontractor names and references are correct
• Payment amounts match your records and bank statements
• Deduction calculations are accurate (labour x rate = deduction)
• Materials costs are properly separated
• You haven't missed any subcontractors

Once you're satisfied everything is correct, submit the return. HMRC will provide an online confirmation — save this for your records.

Step 6: Pay the Deductions to HMRC

Filing the return and paying the deductions are two separate actions. After filing, you need to actually send the money to HMRC. The payment deadline is:

• 22nd of the month if paying electronically (Faster Payments, BACS, CHAPS, or debit/credit card)
• 19th of the month if paying by cheque (though virtually nobody does this any more)

Use your CIS payment reference when making the transfer so HMRC can allocate the payment correctly.

Filing a Nil Return

If you haven't paid any subcontractors during a tax month, you still need to tell HMRC. This is called a nil return. The process is the same as a regular return, but you simply confirm that no payments were made during the period.

Failing to submit nil returns is a surprisingly common mistake — and it can result in penalties just the same as missing a return with actual data.

If you know you won't be paying subcontractors for an extended period, you can contact HMRC to set yourself as "inactive." This temporarily removes the requirement to file monthly returns, but you'll need to reactivate before paying subcontractors again.

Penalties for Late Filing

HMRC takes CIS filing deadlines seriously. If your return is late, here's what you'll face:

• 1 day late: £100 penalty
• 2 months late: additional £200 penalty
• 6 months late: additional penalty of the greater of 5% of the deductions on the return or £300
• 12 months late: additional penalty of the greater of 5% of the deductions on the return or £300

These penalties apply per return and can stack up quickly if you fall behind on multiple months. For a contractor filing returns with, say, £5,000 in monthly deductions, a return that's six months late could cost £600 or more in penalties on top of the deductions owed.

For more on what can go wrong and how to avoid it, see our guide on common CIS mistakes that trigger HMRC penalties.

Using Software to File CIS Returns

While you can file CIS returns through HMRC's online portal directly, many contractors find it easier and less error-prone to use accounting software that handles CIS returns as part of its regular workflow.

Good CIS software will:

• Automatically calculate deductions based on verified rates
• Track materials and labour separately
• Generate payment and deduction statements for subcontractors
• Compile the monthly return data from your payment records
• Submit the return directly to HMRC
• Keep an audit trail of all submissions

If you're looking for software that handles all of this, Accounted's CIS features are designed specifically for contractors and subcontractors in the construction industry.

Common Mistakes When Filing CIS Returns

1. Getting the Tax Month Wrong

The CIS tax month runs from the 6th to the 5th, not the 1st to the 31st. A payment made on 4 March falls in a different tax month to one made on 7 March. Make sure you're allocating payments to the correct period.

2. Not Separating Materials Correctly

If materials aren't properly separated from labour, you'll over-report the deductible amount. This means you'll owe HMRC more than you should, and your subcontractor will have had too much deducted. Always ensure materials are correctly identified and excluded from the deduction calculation.

3. Using the Wrong Deduction Rate

If you haven't verified a subcontractor, or if the verification result indicated 30% and you've applied 20%, your return will be incorrect and you'll underpay HMRC. Always check the verification result before calculating deductions.

4. Forgetting to Submit Nil Returns

As mentioned above, you must file a return even if you haven't paid any subcontractors. Set a reminder for the 15th of each month to ensure you never forget.

5. Not Paying on Time

Filing the return is only half the job. You also need to ensure the deducted amounts reach HMRC by the payment deadline. Late payment can attract interest charges.

How Accounted Simplifies CIS Returns

Filing CIS monthly returns is repetitive, detail-heavy work. Accounted streamlines the process — when you record payments to subcontractors, the system automatically calculates deductions, generates statements, and compiles your monthly return data. When the deadline approaches, everything is ready to submit.

As part of your CIS record keeping, keep copies of all filed returns and HMRC acknowledgements for at least six years.

Want to take the pain out of CIS returns? Compare Accounted to other solutions and see why contractors across the UK are making the switch.

Key Points to Remember

• CIS monthly returns are due by the 19th of each month for the preceding tax month (6th to 5th)
• You must file even if you haven't paid any subcontractors (nil return)
• Returns must include accurate details of every subcontractor payment, including materials breakdowns
• Payment of deductions to HMRC is due by the 22nd (electronic) or 19th (cheque)
• Late filing penalties start at £100 and increase the longer the return is outstanding
• Keep all CIS records for at least six years
• Using dedicated CIS software makes the whole process significantly easier and reduces the risk of errors

Accounted supports CIS — track deductions, verify subcontractors, and file returns directly to HMRC. See CIS support →