CIS Contractor & Subcontractor Tax Filing

If you work in construction as a contractor or subcontractor, you're probably dealing with the Construction Industry Scheme (CIS)—which means contractors deduct tax from subcontractor payments and file monthly CIS returns, while subcontractors need to report those deductions on their tax returns. The Construction Industry Scheme (CIS) requires contractors to deduct tax from payments to subcontractors and submit monthly CIS returns to HMRC (gov.uk Construction Industry Scheme). Contractors must submit CIS returns by the 19th of each month, reporting all subcontractor payments and deductions made in the previous tax month. CIS deductions are made at 20% for standard rate subcontractors or 30% for higher rate subcontractors, with gross payment status subcontractors receiving payments without deduction.

The problem is most contractors and subcontractors find CIS confusing. Contractors struggle with calculating deductions correctly, miss CIS return deadlines, or make mistakes that cause penalties. Subcontractors don't understand how to report deductions on their tax returns or how to claim refunds if over-deducted. That causes problems—late filing penalties, incorrect deductions, HMRC enquiries, and confusion about tax obligations.

We handle CIS contractor and subcontractor tax filing for construction businesses who need proper CIS compliance: CIS return filing (submitting monthly CIS returns to HMRC reporting subcontractor payments and deductions), CIS deduction calculations (calculating deductions at correct rates—20%, 30%, or 0%—excluding materials and VAT), subcontractor verification (verifying subcontractor CIS status with HMRC before applying deductions), subcontractor tax returns (helping subcontractors report CIS deductions on Self Assessment returns and claim refunds if over-deducted), CIS compliance (ensuring CIS obligations are met, records are maintained, and deadlines are met), and gross payment status applications (helping subcontractors apply for gross payment status if eligible). Whether you're a contractor in Medway needing monthly CIS returns, a subcontractor in Maidstone reporting CIS deductions, or a construction business in Canterbury needing full CIS support, we'll handle your CIS tax filing that works. No penalties, no confusion—just proper CIS compliance that keeps you right with HMRC.

What this helps you do (fast)

• Meet CIS return filing obligations — Submit monthly CIS returns to HMRC on time reporting all subcontractor payments and deductions. Proper CIS return filing means no penalties or HMRC enquiries.
• Calculate CIS deductions correctly — Calculate deductions at the right rate (20%, 30%, or 0%) excluding materials and VAT. Accurate calculations mean correct payments to subcontractors.
• Verify subcontractor status — Verify subcontractor CIS registration status with HMRC before applying deductions. Correct verification ensures the right deduction rate is applied.
• Report CIS deductions on tax returns — Report CIS deductions on Self Assessment returns so they're offset against final tax liability. Proper reporting ensures you're not double-taxed.
• Claim refunds if over-deducted — Claim tax refunds if CIS deductions exceed your final tax liability. Refunds put money back in your pocket.
• Apply for gross payment status — Apply for gross payment status if eligible to receive payments without deductions. Gross payment status improves cash flow for subcontractors.

How it works

Step-by-step process for CIS contractor tax filing:

1. Discovery call — We chat about your CIS situation: whether you're a contractor or subcontractor, how many subcontractors you pay (if contractor) or how many contractors pay you (if subcontractor), your CIS registration status, what types of construction work you do, and what you want to achieve.
2. CIS registration check — We check your CIS registration:
   • Contractor registration — Ensure you're registered as a contractor with HMRC if you pay subcontractors
   • Subcontractor registration — Ensure you're registered as a subcontractor with HMRC (reduces deduction rate from 30% to 20%)
   • Gross payment status assessment — Evaluate whether you're eligible for gross payment status (0% deductions) if you're a subcontractor
   • Registration applications — Help you register for CIS or apply for gross payment status if needed
   CIS registration check ensures you're registered correctly and paying the right amount in deductions.
3. Monthly CIS return filing (for contractors) — We file your monthly CIS returns:
   • Payment and deduction recording — Record all payments made to subcontractors in the tax month and deductions withheld
   • CIS return preparation — Prepare CIS return showing all subcontractor payments, deduction rates applied, and deductions withheld
   • Return submission — Submit CIS return to HMRC by 19th of each month (reporting previous tax month's activity)
   • Payment to HMRC — Pay deductions to HMRC by 22nd of each month (or 19th by post)
   • Monthly statements — Issue monthly statements to subcontractors showing payments and deductions
   Monthly CIS return filing keeps you compliant and avoids penalties.
4. CIS deduction calculations (for contractors) — We calculate CIS deductions correctly:
   • Invoice analysis — Analyze subcontractor invoices to separate labour costs from materials, equipment hire, and VAT
   • Deduction rate application — Apply correct deduction rate (20% for registered, 30% for unregistered, 0% for gross payment status)
   • Deduction calculation — Calculate deductions on labour costs only (excluding materials and VAT)
   • Net payment calculation — Calculate net payment to subcontractor (invoice amount minus deductions)
   CIS deduction calculations ensure correct payments and deductions.
5. Subcontractor verification (for contractors) — We verify subcontractor status:
   • HMRC verification — Verify each subcontractor's CIS registration status with HMRC before applying deductions
   • Status confirmation — Confirm whether subcontractor is registered (20%), unregistered (30%), or has gross payment status (0%)
   • Rate application — Apply correct deduction rate based on verification results
   • Documentation — Maintain records of verification for compliance purposes
   Subcontractor verification ensures correct deduction rates are applied.
6. Subcontractor tax return filing — We help subcontractors report CIS deductions:
   • Income reporting — Report full invoice amounts as income on Self Assessment return (not net amounts after deductions)
   • CIS deductions reporting — Report all CIS deductions withheld by contractors throughout the tax year in the 'CIS deductions' field
   • Tax liability calculation — HMRC calculates total tax and NI liability and offsets CIS deductions automatically
   • Balance calculation — Determine whether additional tax is due (if deductions were less than liability) or refund is due (if deductions exceeded liability)
   • Return filing — File Self Assessment return by 31 January deadline
   Subcontractor tax return filing ensures CIS deductions are properly reported and offset.
7. CIS compliance and record-keeping — We help maintain CIS compliance:
   • Record maintenance — Maintain detailed records of all subcontractor payments, deductions, and CIS returns
   • Statement issuance — Ensure monthly statements are issued to subcontractors (contractors)
   • Compliance monitoring — Monitor CIS obligations and deadlines to avoid penalties
   • Audit support — Support you during HMRC CIS audits or enquiries
   CIS compliance and record-keeping protects you from penalties and enquiries.

We handle all aspects of CIS contractor and subcontractor tax filing. The key is accurate deduction calculations, timely CIS return filing, proper subcontractor verification, and correct tax return reporting, so you meet CIS obligations and avoid penalties.

Costs & timelines

Pricing factors:

• Contractor vs. subcontractor — Contractors typically pay more due to monthly return filing obligations
• Number of subcontractors/payments — More subcontractors or payments mean more calculations and reporting
• Complexity of deductions — Simple invoices cost less than complex invoices with lots of materials to separate
• Gross payment status applications — If you need help applying for gross payment status, this adds to the cost
• Tax return filing — Subcontractor tax return filing is separate from CIS return filing (if you're a subcontractor)

Commonly reported ranges by local providers:

• Monthly CIS return filing (contractors, 1-5 subcontractors): £50–£150 per month for monthly CIS return filing with basic deduction calculations
• Monthly CIS return filing (contractors, 6-20 subcontractors): £100–£250 per month for monthly CIS returns with multiple subcontractors
• Monthly CIS return filing (contractors, 21+ subcontractors): £150–£400+ per month for large-scale CIS return filing
• Subcontractor tax return filing (with CIS deductions): £300–£600 for Self Assessment return including CIS deductions reporting
• Gross payment status application: £200–£400 for assistance with gross payment status application
• One-off CIS setup/registration: £100–£200 for initial CIS registration and setup

Why CIS tax filing costs what it does:

• CIS return filing requires monthly preparation and submission to HMRC with strict deadlines
• CIS deduction calculations require careful separation of labour from materials and correct rate application
• Subcontractor verification requires checking each subcontractor's status with HMRC
• Tax return filing requires reporting CIS deductions correctly to ensure proper offset against tax liability
• Record-keeping and compliance monitoring require ongoing attention to avoid penalties

Timeline: Monthly CIS returns are due by 19th of each month (reporting previous tax month's activity). We typically prepare returns 3-5 days before deadline to allow time for review and submission. Subcontractor tax returns follow standard Self Assessment deadlines (31 January). CIS registration and gross payment status applications typically take 2-4 weeks for HMRC to process.

Payment: Monthly CIS return filing fees are charged monthly (alongside each return). Tax return filing fees are charged when returns are filed. Setup fees are charged upfront. We'll discuss payment options when we understand your needs.

No hidden fees. CIS tax filing price includes return filing, deduction calculations, verification, compliance monitoring, and record-keeping. Tax return filing (for subcontractors) and gross payment status applications are separate if needed.

Kent (UK) focus

We work with contractors and subcontractors across Kent who need CIS tax filing help: contractors in Medway paying multiple subcontractors, subcontractors in Maidstone reporting CIS deductions, and construction businesses in Canterbury needing full CIS support.

Kent construction businesses face the same CIS obligations as everyone else—filing monthly CIS returns, calculating deductions correctly, and reporting CIS deductions on tax returns. The difference is when you get proper help with CIS tax filing, you file returns on time, calculate deductions accurately, and report deductions correctly on your tax return. That's what helps Kent contractors and subcontractors avoid penalties, claim refunds if over-deducted, and stay compliant with HMRC.

Common Kent CIS scenarios:

• Small contractors — Contractors with a few subcontractors needing monthly CIS returns
• Large contractors — Contractors with many subcontractors needing comprehensive CIS management
• Registered subcontractors — Subcontractors registered for CIS (20% deduction rate)
• Unregistered subcontractors — Subcontractors needing help with registration or tax return filing
• Gross payment status — Subcontractors eligible for gross payment status needing application help

Kent construction market context:

• Many Kent construction businesses are small to medium-sized with manageable CIS obligations
• Proper CIS tax filing helps Kent contractors and subcontractors stay compliant and avoid penalties
• Accurate CIS reporting helps Kent subcontractors claim refunds if over-deducted
• Local CIS expertise helps Kent construction businesses navigate complex CIS requirements

Remote-first, Kent-focused. We don't need to meet in person (though we can if you prefer), and we understand what Kent construction businesses are dealing with. CIS returns, deduction calculations, subcontractor verification, tax return filing—we'll handle your CIS tax filing that keeps you compliant and avoids penalties.

FAQs