Mastering the CIS Monthly Submission: A Comprehensive Guide to Filing with HMRC
The CIS Returns, a crucial aspect of compliance for contractors in the construction industry, contains detailed information about payments made to subcontractors. In this guide, we’ll delve into the essential aspects of completing and submitting the monthly returns, ensuring that you fulfill your obligations to HMRC. We’ll cover the requirements for filing with HMRC, deadlines, the information you need to provide, and even share an example of a typical CIS Monthly Return. Additionally, we’ll address how to handle situations where no subcontractors have been paid and how to amend a return.
When is the CIS Monthly Return Due?
Contractors are required to file their CIS Monthly Returns within 14 days of the end of the tax month. These tax months all conclude on the 5th of each month, which means that the monthly return must be filed by the 19th of the same month. For instance, the CIS Monthly Return for the period ending September 5, 2023, covering payments made to subcontractors between August 6, 2023, and September 5, 2023, must be filed by September 19, 2023.
What Information is Included on the CIS Return Each Month?
Contractors must accurately record all payments made to subcontractors during the specific tax month. It is imperative to include all subcontractors, regardless of the applicable CIS tax rate, whether it’s gross 0%, net 20%, or the higher 30%. This includes subcontractors with no tax deducted (0%).
The following details are required for submission to HMRC:
- Subcontractor’s name
- Verification number
- Gross payment amount
- Materials amount
- Tax deducted
Nil Return – What if there are no payments to subcontractors?
In some instances, contractors may experience tax months during which no payments were made to any subcontractors. In such cases, a nil return must be filed with HMRC. Failing to file the monthly return will result in HMRC assuming that the CIS return is late, leading to a £100 CIS penalty. This penalty can be cancelled by filing a nil return, although it’s advisable to file all CIS Monthly Returns, including nil returns, promptly.
Amending a CIS Monthly Return
Both the HMRC website and commercial software offer the flexibility to amend CIS returns. Contractors can make necessary changes and resubmit their returns. HMRC has indicated that they won’t issue penalties for filing amended monthly returns, nor will they revoke a subcontractor’s CIS gross payment status, should they have it. However, if HMRC suspects that the monthly return was intentionally filed incorrectly, they may consider further actions.
Filing CIS Monthly Returns may seem like an administrative burden for contractors, but it is a crucial part of fulfilling your obligations in the construction industry. If you’re a newly registered contractor or need assistance with this process, choosing the right software can make a significant difference. Proper and timely filing of CIS returns ensures compliance and minimizes the risk of penalties, helping contractors maintain their financial health and reputation.