A month with no payments to subcontractors is not a month with nothing to do. A registered CIS contractor still has to act by the 19th: either file a nil return or tell HMRC the scheme is inactive. Skip both and the late-filing penalty starts at £100, for a return that would have said "nothing happened". It is one of the most common CIS penalties going, and one of the easiest to avoid.
Why a quiet month still has an obligation
Once a business registers as a CIS contractor, the monthly filing duty switches on, and it does not pause itself when work dries up. HMRC wants either a return or a clear signal that there is nothing to report. As the contractor guide (CIS340) puts it, contractors who have not paid any subcontractors in a month "must let us know by either filing a nil return or notifying us of a period of inactivity by the 19th of the month." Saying nothing is not one of the options.
Your two options for a no-payment month
1. File a nil return. You submit the monthly CIS return showing no payments. It takes a minute through HMRC's online service or your software, and that discharges the obligation for the month.
2. Notify a period of inactivity. If you know a client will not pay any subcontractors for a stretch, tell HMRC and they will mark the scheme inactive for up to 6 months. CIS340 confirms HMRC "will make their CIS scheme 'inactive' for up to 6 months." No monthly returns are expected during that window, which suits seasonal contractors and businesses sitting between projects.
The difference is a practical one. A nil return clears a single month; an inactivity request clears a known gap of up to six. For a client who genuinely stops and starts, inactivity spares you filing the same empty return month after month.
The deadline is the same: the 19th
Whichever option you take, the date does not move. A nil return or an inactivity notification for a tax month (the 6th to the 5th) is due by the 19th of the following month, the same deadline as a return with deductions on it. An empty month buys you no extra time.
What a late nil return costs
This is where contractors get caught out. A late nil return triggers the same fixed late-filing penalty as any other: £100 the day after the deadline, then £200 at two months. It feels disproportionate, a £100 penalty for failing to report that nothing happened, but the penalty attaches to the late filing rather than to the amount on the return.
The later, tax-geared tiers (at six and twelve months, "£300 or 5% of the CIS deductions, whichever is higher") are worked out on the deductions, which on a nil return are zero. HMRC has historically shown some leniency on nil-return penalties. Don't rely on that. What you can count on is that the early fixed penalties bite, so the safe approach is simply never to miss the 19th: file the nil return or log the inactivity.
When the obligation should end entirely
If a client has genuinely stopped being a contractor, having sold the business or stopped engaging subcontractors for good, the answer is not endless nil returns. They should tell HMRC they are no longer a contractor, which closes the scheme and ends the monthly obligation altogether. Inactivity is for a pause; deregistration is for a stop. Pick the wrong one and a client either files needless nil returns or, worse, racks up penalties on a scheme everyone forgot was still open.
The takeaway
For any contractor client with a quiet month, file a nil return or notify inactivity for up to six months by the 19th. A late nil return still costs £100. And if the client has stopped contracting for good, close the scheme rather than filing empty returns forever.
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 who files the CIS monthly return, the 19th deadline in detail, and the 2026 deadline calendar.
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Sources
GOV.UK: https://www.gov.uk/government/publications/construction-industry-scheme-cis-340/construction-industry-scheme-a-guide-for-contractors-and-subcontractors-cis-340
GOV.UK: https://www.gov.uk/what-you-must-do-as-a-cis-contractor/file-your-monthly-returns
Related guides
CIS Monthly Returns & Deadlines: The Complete Guide for Contractors' Accountants
CIS: Contractor vs Subcontractor — Who Files the Monthly Return?
Under CIS the contractor files the monthly return, not the subcontractor. Who counts as each, the 19th deadline, and why a business can be both at once.