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What CIS Contractors Need to Know About HMRC Deadlines
What CIS Contractors Need to Know About HMRC Deadlines
Missing a CIS deadline doesn’t just mean a fine — it can mean losing your gross payment status, damaging contractor relationships, and facing a compliance investigation. Here’s what to keep track of, and when.
What is the Construction Industry Scheme?
The Construction Industry Scheme (CIS) is HMRC’s tax framework for the building trade. If you’re a contractor who pays subcontractors for construction work, you’re legally required to register under CIS, verify your subcontractors with HMRC, and deduct tax at source before paying them.
Subcontractors can be deducted tax at either 20% (standard), 30% (unverified or unregistered), or 0% if they hold gross payment status. The difference is significant — getting verification right protects everyone involved.
The critical deadlines at a glance
| Deadline | What you must do | Penalty if missed |
|---|---|---|
| 19th of each month | Submit your monthly CIS return to HMRC covering payments made to subcontractors in the previous tax month (6th–5th) | £100 for first month; rising to £300, then daily charges |
| 19th of each month | Pay any deductions you’ve made to HMRC (by cheque/post) | Interest and surcharges on unpaid amounts |
| 22nd of each month | Pay deductions electronically (online/BACS) | Same as above; electronic deadline is 3 days later |
| Before first payment | Verify each new subcontractor with HMRC before paying them | Risk of paying at wrong rate; HMRC may hold you liable |
| 5 April annually | End of the tax year — ensure all records are reconciled | Penalties for inaccurate returns |
⚠ Watch outEven if you make no payments to subcontractors in a month, you must still file a nil return by the 19th — or face the same late-filing penalty. HMRC does not waive this requirement automatically.
Submitting your monthly CIS return
Every contractor must file a monthly return showing every subcontractor paid in the preceding tax month, the gross amount paid, materials costs (if applicable), and the deduction made. You can do this via HMRC’s online CIS portal, compatible CIS software, or through an accountant.
Returns are due by the 19th of the following month. For example, payments made between 6 March and 5 April must be reported by 19 April.
Penalties for late or incorrect returns
HMRC takes CIS compliance seriously, and the penalty structure escalates quickly:
- 1 day late: £100 automatic penalty
- 2 months late: an additional £200
- 6 months late: £300 or 5% of the CIS deductions due (whichever is higher)
- 12 months late: a further £300 or 5% — and potential gross payment status review
If you have 12 or more months of consecutive failures, the penalties can reach £3,000 per return.
Gross payment status — don’t lose it
If you’re a subcontractor with gross payment status (meaning contractors pay you in full without deductions), maintaining it requires passing HMRC’s annual compliance test. This looks at whether you’ve filed all returns on time, paid all taxes, and haven’t had significant non-compliance in the past year.
Losing gross payment status is a genuine commercial problem — cash flow drops immediately because 20% of your income is withheld at source. Keeping CIS deadlines is the simplest way to protect it.
Verifying subcontractors before paying
Before making your first payment to any subcontractor, you must verify them with HMRC. This can be done through the CIS online service or via your payroll/CIS software. HMRC will tell you the correct deduction rate. Keep a record of the verification number — you’ll need it if there’s ever a dispute.
💡 Practical tipSet up a recurring calendar reminder for the 15th of each month as your personal “CIS prep day.” That gives you four clear days before the 19th deadline to check payments, run your return, and resolve any verification queries before the penalty window opens.
What records to keep
HMRC can investigate CIS returns for up to six years. You should retain: subcontractor verification details, payment records and invoices, copies of monthly CIS returns, and records of any materials costs deducted. Digital record-keeping with cloud-based accounting software makes this significantly easier to manage.
