Who files, and who does not
Contractors in the Construction Industry Scheme file a monthly return of payments to subcontractors, including the amount withheld. Many small builders are contractors for CIS even if they also do some labour themselves.
A subcontractor who only receives payments does not file this monthly contractor return. They still need the payment and deduction statements to complete Self Assessment or company accounts. Gross payment status changes the deduction rate; it does not remove record-keeping.
The monthly rhythm
The CIS tax month ends on the 5th. The return is due by the 19th (paper) or 19th/online timetable HMRC publishes — confirm the current date on GOV.UK. Nil returns can still be required if the scheme is open but you paid nobody.
Deduction rates depend on whether the subcontractor is registered and verified. Paying someone you have not verified is how the higher default rate appears. Verification is not the same as ‘they told me their UTR over WhatsApp’.
- Verify every subcontractor before the first payment.
- Give each subcontractor a statement of tax deducted.
- Pay the CIS tax to HMRC on the same cycle as the return.
Status still matters
CIS does not decide employment status. A labour-only worker can be inside CIS on paper and still be an employee for PAYE and pensions. See contractor pensions and subcontractors.
Solaratax files CIS for contractors and ties the deductions into year-end. Contact us if you have missed months — late filing penalties accrue on the scheme, not on good intentions.
Questions we are asked
Can I skip a month if I paid nobody?
Often you must still file a nil return while the scheme is active. Check your HMRC account rather than assuming silence is fine.
Does CIS replace Self Assessment for the subcontractor?
No. Tax deducted at source is a credit. The subcontractor still reports profit and claims the credit on their return or in the company.
How do I get gross payment status?
HMRC has turnover, compliance and business tests. Failed returns and unpaid tax are the usual blockers. We can review whether you are close before you apply.
Keep reading
Do contractors need to make pension contributions for subcontractors?
Auto-enrolment follows employment status, not the word contractor. Get the status wrong and you can owe pension contributions, PAYE and penalties.
How PAYE works for employers
PAYE is a payday process, not a year-end cleanup. If the Full Payment Submission is late, the rest of payroll compliance usually follows it downhill.
How to hire your first employee in the UK
The first hire is a compliance event, not only a recruitment one. Get PAYE and the contract right before the first payday.