For Your Business

CIS Returns for Contractors

Change Accountants Tax and Operations: Five People Meeting

If you pay subcontractors, the Construction Industry Scheme is one of the heavier compliance jobs you will carry, and it runs every month rather than once a year. You will need to verify each subcontractor with HMRC before you pay them, deduct tax at the right rate, file a return by the 19th, and give every subcontractor a statement of what you took off. Miss a return or get a rate wrong, and the penalties start quickly. If it is part of what we look after for you, we will run the whole monthly cycle for contractors across Yorkshire and the UK, so the return is filed on time and the deductions are right before the money leaves your account.

In a nutshell: if CIS is part of what we handle for you, we will verify your subcontractors, work out the correct deductions, file the monthly return with HMRC, and produce the deduction statements, with the reverse charge VAT and your payroll handled alongside it. Fixed fee, agreed upfront.

This page is for contractors who pay subcontractors. If you are a subcontractor having CIS taken off your own payments, that side is handled through our Personal Tax Return and Payroll services instead.

What we’ll handle

For a contractor paying more than a handful of subcontractors, the monthly return is only the visible part. The work that keeps it right sits underneath it.

Subcontractor verification. Before you pay anyone new, we will verify them with HMRC to confirm whether they are registered and which deduction rate applies. Pay an unverified subcontractor and you will usually be deducting at 30% rather than 20%.
Correct deduction rates. 20% for registered subcontractors, 30% for those who are not verified or not registered, and 0% for anyone holding gross payment status. We will apply the right one to each payment.
Materials handled separately. CIS is deducted on labour, not on materials. We will split each payment correctly so you are not over-deducting on the materials element.
Monthly CIS returns (CIS300). Filed with HMRC by the 19th of each month, listing every subcontractor you have paid and what you deducted. We will file it on time, every month.
Deduction statements. Every subcontractor needs a statement showing what you paid and what you withheld. We will produce and issue them.
Nil returns. In a month where you have paid no subcontractors, HMRC still expects to hear from you. We will handle the nil return so a quiet month does not turn into a penalty.
CIS suffered, offset correctly. If your own company also has CIS deducted from it, we will set the amounts suffered against your PAYE liabilities rather than leaving them unclaimed.

Employment status, settled before you pay

The risk that costs contractors most is not a late return. It is treating someone as a subcontractor when HMRC would call them an employee. If that call is wrong, HMRC can come back for the PAYE and National Insurance you should have operated, often across more than one year. We will look at how your subcontractors actually work with you and tell you where the status looks solid and where it does not, while it is still a question rather than an assessment.

Gross payment status

If you hold gross payment status, your customers pay you in full with no CIS deducted, which makes a real difference to your cashflow. HMRC sets a turnover, compliance, and business test for it, and reviews it each year. We will help you apply for it if you qualify, and keep your filing and payment record clean so you are not at risk of losing it at the annual review. The tests are set out on gov.uk.

Deemed contractors

You do not have to be a construction business to fall inside CIS. If your business spends more than the deemed contractor threshold on construction work over a rolling period, you are pulled into the scheme and carry the same monthly obligations a builder would. We work with property, development, and larger commercial businesses that are deemed contractors, and we will run the scheme for you the same way.

How we’ll work with you

Around your monthly cycle, three steps.

You tell us who you are paying. Send us the subcontractor payments for the month, with the materials split where there is one. Most clients do this through their bookkeeping or a short summary.

We work out the deductions and send them to you. You will see what each subcontractor is being paid and what is being deducted before anything is filed. We will flag anyone new who needs verifying, and anyone whose status looks worth a second look.

We file the return and issue the statements. Once you have approved it, the CIS300 goes to HMRC by the 19th and the deduction statements go out to your subcontractors. We keep the records.

If HMRC writes to you about a return or a penalty, forward it on. We will either sort it or tell you exactly what to do.

Fixed Fees, No Surprises

You will know what you are paying before we start. A CIS fee depends on how many subcontractors you pay, how often, and whether we are also handling the bookkeeping and payroll that feed it. For most contractors that is a straightforward monthly figure that covers the lot. The right number comes from a short conversation rather than a price list.

Ask us for a fixed-fee quote for your CIS return

A couple of minutes on our online form, and we’ll come back to you with a number.

Who we look after

Main contractors paying a regular book of subcontractors month to month
Property developers and construction firms running CIS across several sites at once
Deemed contractors outside construction who have crossed the spending threshold
Growing contractors taking on subcontractors for the first time and wanting the scheme set up properly
Contractors who are behind on returns or verification, where we will do the catch-up and take it over

Why Clients Stay With us

We have been looking after businesses across Yorkshire and the UK since Stacey McVeighty FCCA founded the practice in 2014. Today we work with around 800 clients from one expanded office in York, with the team that joined us from Sunley & Co working alongside the original Change team under one roof. We are ACCA-accredited, and we hold 38 five-star reviews on Google, most from clients who have been with us for years.

Fixed fees. Plain English. The same team next year, and the year after that.

Everything you need from an accountant....it's like having your own accountant in house. Stacey and the team are always available and nothing is too much trouble.

John Heslop
6 years ago via Google

Frequently Asked Questions

When is the CIS return due, and what happens if it is late?

The monthly CIS return is due by the 19th, covering the tax month that ended on the 5th. A return filed late picks up a penalty straight away, and the penalties climb the longer it stays outstanding. The current penalty amounts are on gov.uk. If we run your CIS, the return goes in on time and the question does not arise.

How do I know which deduction rate to use?

It depends on the subcontractor’s status with HMRC, which is why verification matters. A registered, verified subcontractor is deducted at 20%. One who is not verified or not registered is deducted at 30%. A subcontractor with gross payment status is paid in full with nothing deducted. We will verify each one and apply the correct rate.

Do I deduct CIS on materials?

No. The deduction applies to the labour element of a payment, not to the cost of materials the subcontractor has supplied. Getting the split wrong means over-deducting, which the subcontractor then has to reclaim. We will make sure each payment is split correctly.

Can I move more of the payment across to materials to reduce the deduction?

It is a question that comes up, and the answer is no. The materials figure has to be the genuine cost of the materials the subcontractor supplied, backed by receipts or invoices. It is not a number you can set to suit the deduction. If it is overstated, HMRC treats the difference as labour that should have had CIS taken off, and it is you as the contractor who is liable for the tax that was not deducted, usually with a penalty on top. It also puts your own compliance record, and your gross payment status if you hold it, at risk. We work the split from the actual costs, so the return stands up if anyone looks at it.

Can you apply for gross payment status for us?

Yes. If your turnover, compliance record, and business type meet HMRC’s tests, gross payment status lets your customers pay you without deducting CIS, which helps your cashflow considerably. We will handle the application, then keep your filing record clean so you hold on to it at the annual review.

What changed for gross payment status in April 2026?

The rules tightened in two ways that matter if you hold it. Since 6 April 2026, HMRC can cancel gross payment status immediately where it decides a business knew, or should have known, that it was part of a supply chain involving tax fraud, rather than waiting for a review. And if your status is cancelled, the wait before you can reapply has been extended to five years, up from one. The effect is that gross payment status is easier to lose and much slower to win back, so keeping your returns and payments clean, and knowing who you take on, matters more than it did. If we run your CIS, that is part of what we watch for you. The current position is set out on gov.uk.

We have fallen behind on our CIS returns. Can you help?

Yes. We take on contractors mid-stream, including where returns are late or verification has slipped. We will work out where you stand with HMRC, bring the returns up to date, and then run the monthly cycle going forward so it stays on top of itself.

Ready to hand off your CIS?

Three ways to start. Whichever’s easiest.

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