Under the Construction Industry Scheme, the contractor files the monthly return, not the subcontractor. The contractor deducts money from what it pays subcontractors, reports it to HMRC on a monthly CIS return by the 19th, then pays the deductions over. The subcontractor files nothing under CIS. They recover the deductions through their own tax return. Get this the wrong way round and you either miss a return or chase a client for one they never had to make.
Who counts as a contractor?
Two types, and the second catches people out:
- Mainstream contractors — businesses that pay subcontractors for construction work. The obvious case.
- Deemed contractors — businesses outside construction that spend heavily on it. If a business spends more than £3 million on construction in any rolling 12-month period, it must operate CIS, even if it has nothing to do with the building trade. HMRC's CIS overview sets out both tests.
So a property investor, a retailer fitting out stores, or a manufacturer with a big site programme can all be contractors for CIS, with the full monthly-filing obligation that brings.
Who counts as a subcontractor?
A subcontractor is a business that carries out construction work for a contractor. Their position under CIS is passive. They get verified, they have deductions taken from their payments, and that's the extent of what the scheme asks of them. A subcontractor does not file a CIS return. HMRC explains the deductions "count as advance payments towards the subcontractor's tax and National Insurance" — money paid on their behalf, which they later set against their own bill.
A business can be both at once
This is where the labels stop being tidy. A building firm that takes on jobs and also engages its own subcontractors is a subcontractor on the money coming in and a contractor on the money going out. It has deductions taken from its payments and must file monthly returns for the subcontractors it pays. When you take on a construction client, work out which side of each payment they sit on before you assume what they file.
What the contractor files, and when
The contractor sends a monthly CIS return (HMRC's form CIS300) covering payments to subcontractors. The CIS tax month runs from the 6th to the 5th, and the return is due by the 19th of the following month. HMRC's guidance for contractors gives the worked example: "if you're making a return for the tax month of 6 May to 5 June, it must reach HMRC by 19 June."
Filing the return and paying the deductions are two separate deadlines, which trips people up:
| Action | Who does it | Deadline (after the 6th–5th tax month) |
|---|---|---|
| File the monthly CIS return | Contractor | 19th |
| Pay the deductions to HMRC | Contractor | 22nd (electronic) or 19th (cheque by post) |
| Recover the deductions suffered | Subcontractor | Through their own Self Assessment or company tax return |
What the subcontractor does instead
The deductions a subcontractor suffers are not lost. They are credits. A sole-trader subcontractor sets the CIS deductions against the tax due on their Self Assessment return; a limited-company subcontractor recovers them through the company's payroll/PAYE position or its Corporation Tax. For filing purposes the point is simple. The subcontractor's CIS obligation is to keep the deduction statements their contractors give them, not to file a monthly return. If you find yourself drafting a CIS return for a pure subcontractor client, stop. There isn't one to file.
What happens if the contractor files late
The monthly return carries a fixed penalty ladder that starts straight away. Per HMRC's contractor guidance: £100 the day after the deadline, £200 at two months, and at six months the greater of £300 or 5% of the CIS deductions on the return, with a further penalty on the same basis at twelve months. Those stack per return, so a contractor who falls behind across several months racks up penalties fast. The deadline is the same every month. That makes it exactly the kind of recurring date worth automating rather than carrying in your head.
The takeaway
The contractor files the monthly CIS return by the 19th and pays the deductions by the 22nd (electronically); the subcontractor files nothing under CIS and recovers their deductions through their own return. Check whether a construction client is a contractor, a subcontractor, or both — including the deemed-contractor £3 million test for non-construction businesses — before you decide what they owe HMRC each month.
This is general information, not advice — check the GOV.UK guidance, or a client's specific position with a qualified accountant, before acting. See also CIS monthly returns and the 19th deadline, and the 2026 deadline calendar.
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Sources
GOV.UK: https://www.gov.uk/what-is-the-construction-industry-scheme
GOV.UK: https://www.gov.uk/what-you-must-do-as-a-cis-contractor/file-your-monthly-returns