Every month contractors must file a CIS monthly return with HMRC. How do you complete a CIS monthly return? When is it due to be filed? We include an example of a CIS return and how to go about amending incorrect returns.
The CIS monthly return must be filed within 14 days of the tax month end. All tax month ends are the 5th of each month, so the monthly return must be filed by the 19th of the month.
For example the monthly return ending 5th September 2020 covers all payments made to subcontractors between 6th August 2020 and the 5th September 2020. This CIS return must be filed by 19th September 2020.
The contractor must identify all payments to subcontractors in that tax month. The CIS monthly return must include all subcontractors. It does not matter if they are gross 0%, net 20% or higher 30% they are all included on the return. For more information see our blog CIS tax rates.
Tip: Don’t forget to include subcontractors with 0% tax deducted. Contractors should identify all subcontractors paid in that tax month, even those with no tax deducted.
The contractor must submit the following information to HMRC:
– Subcontractors name
– Verification number
– Gross amount
– Materials amount
– Tax deducted
For more information on the above requirements see the blogs CIS subcontractor verification and CIS calculation example.
To file the CIS monthly return the contractor can either use the HMRC website or commercial software. Obviously contractors would use the same program as what was used when completing the CIS subcontractor verification process.
Below is an example of what the CIS return looks like when it is filed using the HMRC website.
Contractors may have tax months in which there have been no payments to any of its subcontractors. When this happens they must file a nil return with HMRC.
If the contractor does not file the monthly return HMRC will assume that the CIS return is late. HMRC will issue a CIS penalty of £100. This penalty will be cancelled if a Nil return is then filed, however it is always best just to file all CIS monthly returns, even Nil returns on time.
Both the HMRC website and commercial software allow you to file amended CIS returns.
HMRC have stated that they will not look to issue penalties for filing amended monthly returns. They also won’t take away the subcontractors CIS gross payment status, should they have it.
However if HMRC believe that the CIS monthly return was intentionally filed incorrectly they may look to take things further.
Filing CIS returns each month can feel like an unnecessary administrative burden placed on contractors. If you are a newly registered contractor and need some assistance or if you are an existing contractor who wants to be relieved of this burden then why not contact us.
At Patterson Hall Chartered Accountants we assist and file CIS monthly returns for numerous of our contractor clients. This then allows them to do what they do best as contractors, safe in the knowledge that the paperwork is being dealt with by experts in this area of tax compliance.
At Patterson Hall Chartered Accountants we are experts within all aspects of the Construction Industry Scheme. We have produced an ultimate guide to all things CIS with many user friendly helpsheets and examples. Take a look at our CIS Accountants guide.
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