What the CIS300 return is
The CIS300 is the monthly return every contractor in the Construction Industry Scheme must send HMRC. It declares the subcontractors you paid that tax month, the amounts, and the CIS deductions you took off. The tax month runs from the 6th of one month to the 5th of the next, and the return must reach HMRC by the 19th of that next month.
It's a declaration, not a payment in itself — but you also pay the deductions you withheld over to HMRC, normally by the 22nd if you pay electronically. The return is filed online through HMRC's CIS service or compatible commercial software.
What you need before you file
Pull these together for the tax month before you start the return:
- Your details — your contractor UTR and the Accounts Office / PAYE references you registered with.
- Each subcontractor's UTR — their Unique Taxpayer Reference.
- Verification numbers — from when you verified the subcontractor with HMRC, which set their rate.
- The deduction rate per subcontractor — 20% (verified), 30% (unverified) or 0% (gross status).
- The labour / materials split for each payment — the deduction applies to labour only.
- The deduction amount and net paid for each subcontractor that month.
Verifying a subcontractor before their first payment is what gives you the correct rate and the verification number — skip it and you default to the 30% higher rate. The rate detail is set out in the CIS deduction rates guide.
Filing the return: step by step
- Gather the month's payments. List every subcontractor you paid between the 6th and the 5th, with the labour/materials split for each.
- Confirm each rate. Check each subcontractor's verified status so you apply 20%, 30% or 0% correctly.
- Calculate the deductions. Apply the rate to the labour element only; materials, VAT and qualifying plant are excluded.
- Enter the figures into HMRC's online CIS service (or your software): per-subcontractor gross paid, materials, and deduction.
- Make the monthly declaration. Confirm employment status and verification declarations, then submit by the 19th.
- Pay the deductions over to HMRC for the month.
- Issue payment and deduction statements to each subcontractor so they can reclaim the deduction against their own tax bill.
Not sure of a deduction figure? The free CIS calculator works out the deduction, net pay and the labour/materials figures you enter on the return — no sign-up needed.
Nil returns and inactivity
Paid no subcontractors this month? You still have to act. Either file a nil returnfor the month, or tell HMRC you'll be inactive (for up to six months) so they don't expect returns. What you can't do is simply ignore it — a missing return is treated as late and the £100 penalty lands all the same.
The penalties for filing late
Miss the 19th and the penalties stack:
| How late | Penalty |
|---|---|
| 1 day late | £100 |
| 2 months late | £200 (on top) |
| 6 months late | £300 or 5% of deductions, whichever is higher |
| 12 months late | A further £300 or 5%, higher in serious cases |
The penalties apply per return, so a couple of forgotten months add up fast. The simplest defence is having the figures ready well before the 19th rather than scrambling on the deadline.
Common mistakes to avoid
- Deducting on materials. The deduction is on labour only — over-deducting short-changes the subcontractor.
- Using 20% without verifying. An unverified subcontractor is 30%; only verification confirms 20%.
- Forgetting the nil return. No payments still means a return or an inactivity notice.
- Missing the statements. Subcontractors need their payment and deduction statement to reclaim the tax.
- Leaving it to the 19th. Re-keying every invoice at the last minute is where errors and late filings happen.
Getting ready faster
Most of the effort in a CIS return isn't the submission — it's assembling the figures: splitting every invoice into labour and materials, confirming rates, and re-keying it all into your books. That's the part CISflow removes.
Forward a subcontractor invoice and CISflow extracts the CIS fields — UTR, verification number, the labour/materials split, the rate, the deduction and net pay — for you to review and approve, then drops a clean CIS bill into Xero and gives you the totals you need for the CIS300. You file with HMRC; CISflow just kills the data-entry that makes returns slow and error-prone.
It's live and in early access. Start free, or use the free calculator today.
Keep reading
This guide is general information on UK CIS, not tax advice. Deadlines and penalty amounts can change — always check the current rules on GOV.UK. CISflow is a data-entry tool, not an accountancy or tax service; you remain responsible for figures and returns submitted to HMRC.
CIS return questions
- When is the CIS return due each month?
- The CIS300 monthly return is due by the 19th of the month. It covers the tax month that runs from the 6th of the previous month to the 5th of the current month. So a return for the tax month ending 5 May must reach HMRC by 19 May.
- Do I have to file a CIS return if I paid no subcontractors?
- Yes — if you're an active contractor in the scheme and made no payments in a tax month, you still file a nil return (or notify HMRC of inactivity for up to six months). Simply not filing is treated as a late return and triggers the £100 penalty.
- What is the penalty for a late CIS return?
- A £100 fixed penalty applies the moment a return is one day late. A further £200 is added once it is two months late. At six months it rises again (the greater of £300 or 5% of the deductions), and again at twelve months, so a forgotten return becomes expensive quickly.
- What do I need before I can file a CIS return?
- For each subcontractor paid that month you need their UTR and verification number, the verified deduction rate (20%, 30% or 0%), and the invoice split into labour, materials and deduction. You also give each subcontractor a payment and deduction statement so they can reclaim the deduction against their own tax.