For small building contractors who pay subcontractors under CIS: record what you paid each subcontractor and what you deducted, and get the monthly return for HMRC and a statement for each subcontractor in time for the deadline.
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A roofing contractor in Bristol pays four subcontractors every week. At the end of each tax month he used to add up the payments from his bank app and type the return on the 18th. Now each payment is recorded with labour and materials apart, the deductions are worked out at each subcontractor's rate, and on the 6th the return and four statements are ready.
See the offerUnder the Construction Industry Scheme, a contractor who pays subcontractors for construction work has to send HMRC a monthly return by the 19th of each month, listing the payments made in the tax month and the tax deducted.
Each subcontractor must also get a statement of what was paid and what was deducted, so they can claim it back against their own tax. A late return brings a £100 penalty, and more if it stays late. Answers to common questions are in the questions section, and you can start at the bottom of the page.
CIS Monthly does one narrow job: it keeps your CIS payments and prepares the monthly return and the subcontractor statements.
Each payment is recorded with the subcontractor, the date and the amounts for labour and for materials, because deductions are taken from labour only.
The deduction rate of each subcontractor is kept with them — 20% for registered, 30% for unregistered, or gross payment status — so the amount to deduct is worked out on each payment.
At the end of the tax month, on the 5th, the return is ready with every subcontractor and the totals, so you can check it and submit it before the 19th.
Each subcontractor gets a payment and deduction statement for the month, ready to send by email.
If you paid no subcontractors in a month, the service reminds you that a nil return may still be needed.
It is meant for small contractors — builders, roofers, electricians, groundworkers and plasterers — who pay a few subcontractors and do their own paperwork.
All returns and statements stay available by tax year, so you can answer a subcontractor's question or an HMRC check later.
The CIS tax month does not follow the calendar: it runs from the 6th of one month to the 5th of the next. The service files each payment in the right tax month by its date, so a payment made on the 5th and one made on the 6th land in different returns, as HMRC expects.
When a subcontractor's materials are on the invoice, only the labour part is subject to the deduction. Keeping labour and materials apart on every payment means the deduction is not taken from the cost of materials by mistake, and the subcontractor's statement shows both amounts.
If a new subcontractor joins in the middle of the month, you add them with their rate once, and from then on every payment to them is worked out the same way. A subcontractor who leaves stays in the history, so last year's statements can still be found.
Before the deadline you see one simple list: which months are ready, which are still open and how many days are left until the 19th.
To start, you only need the list of your subcontractors and the payments of the current tax month.
CIS Monthly prepares the return and the statements; verifying subcontractors with HMRC and submitting the return stay your responsibility.
By the 19th of each month, for the tax month that ended on the 5th.
Small UK contractors who pay subcontractors for construction work under CIS.
No. It prepares the return and the statements; you submit the return in your HMRC account.
Not yet. The service is being prepared, and we are checking whether contractors in the UK need it.