CIS Returns for Construction Companies

Are CIS returns becoming a monthly source of stress?

CIS Returns for Construction Companies are monthly reports required by HMRC under the Construction Industry Scheme whenever contractors pay subcontractors. Below we explain who needs to register, how subcontractor verification and deduction rates work, what the deadlines are, and how we prepare and submit your monthly returns accurately and on time, so your business stays compliant without the late nights and the last-minute panic.

Construction businesses rarely struggle because of a lack of work. They struggle because of time. Quoting jobs, managing sites, coordinating subcontractors and keeping projects moving already fills the day, and CIS too easily gets pushed into the evening when concentration is low and mistakes are more likely. At Fairbook Accounting Solutions, we handle the whole process for you, verifying subcontractors, applying the correct deduction rates, submitting monthly returns on time and reconciling everything with your wider bookkeeping and VAT.

We are a small, experienced team based near Hastings, supporting construction clients across East Sussex and throughout the UK.

Get In Touch

What CIS actually involves each month

Each tax month runs from the 6th to the 5th, and the return must be submitted by the 19th of the following month. Before any subcontractor is paid, they must be verified with HMRC, who confirm whether deductions should be made at the standard rate of 20%, the higher rate of 30% for those who are not registered, or 0% if they hold gross payment status. Deductions apply only to the labour portion of an invoice, not the materials, and getting that split right is one of the most important parts of the job. The full rules are set out in HMRC’s CIS 340 guide.

Once payments are made, the return must list every subcontractor and every payment, the deducted amounts must be paid over to HMRC on time, and a deduction statement must be issued to each subcontractor as a record of what was withheld. From 6 April 2026, monthly nil returns are once again mandatory whenever no payments have been made, and the full late filing penalty regime under Schedule 55 of the Finance Act 2009 has been reinstated. A return that is even one day late triggers an automatic £100 penalty, with further penalties stacking up the longer it stays outstanding.

Who needs to submit CIS returns?

CIS applies right across the building and trades sector, including general contractors, electricians, plumbers, roofers, carpenters, bricklayers, groundworkers, plasterers, landscapers and property developers. It applies whether you operate as a sole trader, partnership or limited company, and whether you manage a single subcontractor or a full team across several sites. If you are uncertain whether CIS registration is required for the work you do, we will look at your contracts and confirm this clearly, so there are no nasty surprises with backdated liabilities further down the line.

Some clients come to us because they are new to CIS and want reassurance they are doing things correctly from the start. Others have been managing it themselves for years and reach a point where it is taking up too much headspace, so they want it handled properly and taken off their plate. Either way, we work in a structured monthly rhythm so nothing slips.

Prefer real people who understand your area and your trade?

Being based in St Leonards on Sea gives us a real understanding of working life across Hastings and East Sussex, where so much of the local economy rests on the trades. We know the rhythm of building work in the area, from busy summer schedules to the quieter winter months when cash flow tightens. While we work with construction businesses across the UK, we have a strong local presence in Hastings, Bexhill-On-Sea, Eastbourne and Hailsham, and our cloud systems mean we can support sites further afield with the same level of care, consistency and responsiveness.

Taking the stress out of CIS Returns for Construction Companies

Most construction businesses only realise there is a problem when a return has been missed, a deduction rate has been applied incorrectly, or the records do not match the bank payments. Sometimes it is a compliance check from HMRC, sometimes a subcontractor querying their deduction statement, and sometimes the issues only come to light when CIS data fails to reconcile with the VAT return or the year-end accounts. These problems are almost always caused by rushed submissions and unclear records, not a lack of care.

When CIS is prepared properly, it stops being a worry. Returns are verified, calculated and submitted correctly, on time, every time, and the figures align with your bookkeeping, your VAT and your year-end accounts. CIS deductions also feed directly into Self Assessment for sole traders and partners, and into corporation tax for limited companies, so accuracy matters well beyond the monthly submission. Our role is to keep all of that joined up, so the wider picture stays clean.

Deadlines and peace of mind

CIS returns must be submitted to HMRC by the 19th of each month, and deducted amounts must be paid over by the same date when paying by post, or by the 22nd when paying electronically. Late filing leads to automatic penalties that escalate quickly, and from April 2026 a tax-geared penalty also applies if a return remains outstanding for twelve months. We make sure everything is prepared in good time, submitted correctly and confirmed as received, so you are not dealing with last-minute pressure or unexpected fines.

Because CIS does not sit in isolation, we keep it joined up with your bookkeeping and VAT, payroll and year-end accounts. When all of these line up, financial reporting becomes smoother, Making Tax Digital compliance is straightforward, and there are no surprises at the end of the year.

What we need to manage your CIS Returns for Construction Companies

To run the process efficiently, we need clear subcontractor details, accurate labour and materials breakdowns, payment dates and amounts, and consistent record keeping each month. We will agree a structured way of sharing this information that fits around your working day, so there is no last-minute searching when the deadline approaches.

Our fees depend on the number of subcontractors you pay, how often payments are made and the current condition of your records. After a short review we will provide clear pricing and a practical route forward, and if any historic records need attention, we will tidy those up first before moving into a steady monthly process.

Get In Touch

Frequently Asked Questions

Do I have to submit a CIS return every month?

Yes. If you are registered as a contractor under the Construction Industry Scheme and you pay subcontractors, a monthly return is required. From 6 April 2026, a nil return must also be submitted for any tax month in which no subcontractors are paid, otherwise penalties can apply. If you know in advance that there will be a long stretch with no payments, an inactivity request can be made to HMRC to pause the requirement temporarily.

What happens if a CIS return is late?

HMRC issues an automatic £100 penalty as soon as a return is one day late, and further penalties build up the longer it stays outstanding, including a tax-geared penalty at twelve months under the reinstated Schedule 55 regime. Bringing returns up to date as quickly as possible is always the priority, and we regularly help clients catch up where things have slipped.

How do I know the correct deduction rate for a subcontractor?

Subcontractors must be verified with HMRC before payment, and HMRC confirms whether deductions should be made at the standard rate of 20%, the higher rate of 30%, or whether the subcontractor qualifies for gross payment status at 0%. Applying the wrong rate causes problems later, so verification is the first step every time.

Do I need to separate labour and materials?

Yes. CIS deductions apply to the labour portion of the invoice, not the materials, and incorrectly calculating this split is one of the most common causes of errors in CIS returns for construction. We work through the figures carefully each month so the right amount is deducted and reported.

Can you help if I am behind or worried about penalties?

Yes. Many clients come to us feeling anxious because a return is late or HMRC has been in touch. We help you understand the position, bring things up to date, and deal with HMRC compliance and queries on your behalf, so you are not handling it alone.