CIS300 contractor's monthly return: what to report and when

Who needs it

• Mainstream contractors: builders, labour agencies, gangmasters and property developers who pay subcontractors for construction work.
• Deemed contractors: businesses that don't do construction but have spent more than the CIS threshold on it in a rolling 12 months, such as housing associations.
• Sole traders, partnerships and limited companies alike: the rules depend on what the business pays for, not how it's set up.

What you need before you start

• Your employer PAYE reference and Accounts Office reference, from HMRC's registration letter.
• Each subcontractor's name as HMRC holds it, their UTR, and the verification number where HMRC told you to deduct at the higher rate.
• The gross amount paid to each subcontractor in the tax month (6th to 5th), excluding VAT.
• The cost of materials each subcontractor invoiced you for, and the amount you deducted.
• Access to the CIS online service or recognised commercial CIS software.

How to file CIS300

1. 1Verify any new subcontractor with HMRC before you first pay them. HMRC tells you whether to pay gross or deduct at the standard or higher rate.
2. 2For each payment, take the gross invoice, remove VAT and the subcontractor's own materials and similar costs, and deduct the rate HMRC gave you from what's left.
3. 3Give each subcontractor a payment and deduction statement within 14 days of the end of the tax month.
4. 4Send the monthly return by the 19th, listing every subcontractor paid, and tick the declaration that none of them should be employees.
5. 5Pay the deductions to HMRC by the 22nd (the 19th by post), with your PAYE if you run payroll.
6. 6If you paid no one, file a nil return or make an inactivity request by the same date.

What the return covers

HMRC's CIS 340 guide says each monthly return must be a complete return of all payments to all subcontractors in the scheme in the previous tax month, whether they were paid gross, after the standard deduction or after the higher deduction. A tax month runs from the 6th to the 5th, so payments between 6 May and 5 June go on the return due by 19 June.

CIS300 is the name of HMRC's monthly return. In practice you complete it in the CIS online service or in payroll or CIS software. HMRC's internal manual describes paper versions it can issue, but GOV.UK points contractors to the online routes.

Nil returns and inactivity

From 6 April 2026, HMRC has reinstated the obligation on mainstream contractors to file a nil return when they paid no subcontractors, unless they've told HMRC the scheme is inactive. An inactivity request lasts up to six months and can be renewed. Filing a return with payments ends it.

Deemed contractors aren't legally required to file nil returns, but HMRC issues a penalty if they neither file one nor declare inactivity, and cancels it once told no one was paid.

Corrections and penalties

Correct a return through the same route you filed it: the CIS online service has an 'Amend return' option, and software may or may not support amendments. HMRC's software can't amend a return that was sent through third-party software.

Late returns cost £100 the day after the deadline and £200 at two months. At six and twelve months HMRC charges the greater of £300 or 5% of the deductions on the return each time, and more where information was deliberately withheld. You can appeal within 30 days of the penalty notice.

Common mistakes

• Assuming no return is needed in a quiet month. From 6 April 2026 mainstream contractors must file a nil return or tell HMRC they're inactive, or a penalty follows.
• Mixing the CIS online service and commercial software. HMRC warns that using both can overwrite returns.
• Getting a subcontractor's employment status wrong. The declaration is on every return, and HMRC can charge up to £3,000 for a wrong one.
• Entering negative figures in commercial software. HMRC asks for 0 instead.
• Leaving out subcontractors paid gross. The return covers every payment in the scheme, not just those with deductions.
• Keeping records for too short a time. HMRC expects at least three years after the end of the tax year.