The CIS300 monthly return: a complete guide for contractors

If you are a contractor in the Construction Industry Scheme (CIS), the CIS300 monthly return is the filing that keeps you compliant — and the one that generates penalties fastest when it slips. This guide covers what goes on the return, every deadline in the monthly cycle, how nil returns work, and exactly how the penalty ladder escalates.

What is the CIS300?

The CIS300 is the monthly return every CIS contractor must send to HMRC. It reports:

• Every subcontractor you paid in the tax month, whether or not tax was deducted;
• The gross amount of each payment (excluding VAT);
• The cost of materials the subcontractor supplied, which is excluded before the deduction is calculated;
• The CIS deduction withheld from each payment at 20%, 30% or 0% — see our guide to CIS deduction rates for how each rate applies.

The return also contains two declarations: that you have verified the employment status of the people you paid (they are genuinely self-employed subcontractors, not employees), and that you have verified each subcontractor with HMRC where required.

The CIS monthly cycle: every deadline

CIS runs on HMRC tax months, which end on the 5th. The full cycle looks like this:

Date	What happens
6th of month	New tax month begins
5th of following month	Tax month ends — every payment made to subcontractors between these dates belongs on this month’s return
19th	CIS300 return due at HMRC. Also the deadline to give each subcontractor their payment and deduction statement, and to pay HMRC by post
22nd	Deadline to pay the CIS deductions to HMRC electronically (together with any PAYE/NIC due)

Two practical points trip contractors up. First, the return is driven by payment date, not invoice date — an invoice dated 3 May paid on 8 May belongs in the tax month ending 5 June. Second, the 19th is a receipt deadline, not a posting deadline: file before the day itself.

Nil returns: yes, you still have to tell HMRC

A month with no subcontractor payments does not mean a month with nothing to do. If HMRC’s systems are expecting a return from your scheme and nothing arrives, an automatic £100 penalty is issued — even though you owed nothing.

When you paid no subcontractors in a tax month, you must submit a nil return (or report the period of inactivity to HMRC). If you expect a longer gap — for example, a seasonal shutdown — you can tell HMRC the scheme will be inactive for up to six months, which pauses the filing requirement.

Good CIS software makes a nil return a two-minute job: no subcontractor lines, submit, keep the acknowledgement.

The penalty ladder for late CIS300 returns

CIS late-filing penalties are automatic and escalate on a fixed timetable:

How late	Penalty
1 day late	£100
2 months late	A further £200
6 months late	A further £300 or 5% of the CIS deductions on the return, whichever is higher
12 months late	Another £300 or 5% — and in serious cases a higher penalty of up to 100% of the deductions (minimum £1,500, or £3,000 where information was deliberately withheld)

Because the penalties apply per return, a contractor who stops filing for a few months can accumulate four figures of penalties quickly. If you have missed returns, file them all as soon as possible — penalties can be appealed where you have a reasonable excuse, but “I forgot” is not one.

Payment and deduction statements

By the same 19th deadline, you must give every subcontractor you deducted tax from a written payment and deduction statement for the month. Subcontractors rely on these statements to reclaim or offset the tax withheld, so late or missing statements cause real friction — and HMRC can charge penalties for failing to provide them.

The statement must show your details, the subcontractor’s details and verification number where the 30% rate applied, the gross payment, the cost of materials, and the amount deducted.

Before the return: verification

Before paying a new subcontractor for the first time, you must verify them with HMRC. Verification tells you which deduction rate to apply:

• 20% — the subcontractor is registered for CIS;
• 30% — HMRC cannot match the subcontractor (or they are not registered);
• 0% (gross payment) — the subcontractor holds gross payment status and you deduct nothing.

You do not need to re-verify a subcontractor you have included on a return in the current or previous two tax years. Keep the verification reference — it goes on the statement whenever the higher rate is applied.

Getting the deduction right

The deduction applies to the labour element of the payment only. Start with the gross amount charged, exclude VAT, subtract the cost of materials the subcontractor actually incurred, then apply their rate to what remains. Try our free CIS deduction calculator to see the arithmetic on your own figures, including the materials split.

How software changes the workload

Everything above — verification, rate selection, materials splits, the return itself, statements, nil returns — is a manual chore on paper and a few clicks in payroll software that treats CIS as a first-class feature. Taxriva files the CIS300 directly to HMRC from the same product that runs your payroll, generates the payment and deduction statements automatically, and keeps the acknowledgement trail for every month. See how it works on our CIS payroll software page, or compare the market in our guide to the best CIS payroll software for UK contractors.

Quick reference

• Tax month runs 6th → 5th; the return for it is due by the 19th.
• File a nil return for months with no payments — or expect a £100 penalty.
• Pay deductions to HMRC by the 22nd (electronic) or 19th (post).
• Give subcontractors their statements by the 19th.
• Penalties: £100 → +£200 → +£300/5% → +£300/5%, per return.
• Verify new subcontractors before first payment; deduct 20%, 30% or 0% as HMRC directs.