Date Published: August 27th, 2019

CIS Monthly Returns for Subcontractors

Every contractor working in construction industry has to mandatory file CIS returns before the 19th of each month. It is mandatory to file CIS returns so that you can inform HMRC that how much tax is deducted from subcontractor’s working under your supervision. It should be paid to HMRC on time.

You can easily file returns by using –

  • HMRC CIS online service
  • Commercial CIS software

You need to declare on your return to HMRC that the subcontractors listed are not employees. In case you declare wrong employment status for a subcontractor on your monthly return, you may need to pay a penalty of up to £3000 to HMRC. There is no need to file returns for the months in which no payments are made to the sub-contractors but you have to tell HMRC that no return is due.

CIS Returns using Commercial CIS software  

In case you are using commercial CIS software, your return must not include any negative values. If any entry comes less than 0, you should put it as “0” instead of writing it in negative.

HMRC may ask you later to give details about the entries you replaced.

Deadline for Monthly CIS Returns Filing

The deadline for filing monthly CIS returns to HMRC is 19th of every month following the last tax month.

Penalties on Filing of Late CIS Return

If you will miss the filing deadline, you need to pay penalty on late CIS return. The chart for penalties on filing of late CIS return is given below –

How late the return is Penalty
1 day late £100
2 months late £200
6 months late £300 or 5% of CIS deductions on the return (Whichever is higher)
12 months late £300 or 5% of CIS deductions on the return (Whichever is higher)

Note – In case you submit CIS return later than the period mentioned above, you may have to pay an additional penalty of up to £3000 or 100% of the CIS deductions (whichever is higher)

The penalty will only be cancelled by HMRC when you inform them that you didn’t pay your sub-contractors in that particular month.

 If you disagree with a penalty  

If you are disagree with the decision of penalty imposed by HMRC, you can do appeal against the penalty notice within 30 days –

  • Through HMRC’s online service
  • By writing a letter to HMRC mentioning UTR and payment reference number displayed on the notice sent by them.

Correcting or changing CIS Returns

If you want to correct or change your CIS returns, use HMRC CIS online service or you can also call CIS helpline in case you need any help.

Record Keeping Under Construction Industry Scheme

Under construction industry scheme, you need to keep record of the following –

  • Gross amount of each payment excluding VAT invoiced by subcontractors.
  • Any deductions made by you from Subcontractor payments

In case you made deductions from subcontractor payments, you must maintain a record of cost of material for which the subcontractor invoiced you (excluding VAT).

After the end of the tax year, you need to maintain these 3 details with you for at least 3 years.HMRC may ask you about these records anytime.

In case you are unable to show these records, you can be fined up to £3000 by HMRC.

Tell HMRC about changes

You have to mandatory tell HMRC about the following changes –

  • Change in individual or business address
  • Change in business structure. For ex – Sole trader to limited company
  • Contractor’s death
  • You must tell HMRC within 90 days – If you are a multiple contractor and taking on another contractor’s business.

If you stop trading or using subcontractors

In case you stop trading or using sub contractors, you must do the following –

  • Tell HMRC in time
  • Stop filing monthly CIS reports to HMRC.

Note – Do this even if you have stopped using subcontractors temporarily)

How Nomisma Software helps in filing CIS return?

Nomisma cloud corporation tax Software is one of the best CIS return software’s for Contractors, Sub-contractors, freelancers etc. You can easily file your CIS returns with this corporation tax software. This commercial software provides access to everything in a much easier way in comparison to other software’s. You will find everything online along with automatic updates and data backup. With the help of Nomisma cloud Corporation tax software, you can run your business from any part of the world.

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