CIS returns handled correctly — so you can get on with the job
The Construction Industry Scheme is one of the most administratively demanding tax regimes in the UK. Miss a deadline, verify a subcontractor incorrectly, or file an inaccurate return and the penalties arrive fast. Hulljady Chartered Accountants takes the entire CIS burden off your hands — from subcontractor verification to monthly returns to year-end reconciliation.
WHAT WE DO
Why getting CIS right matters more than most contractors realise
Whether you are a main contractor managing dozens of subbies, a subcontractor trying to reclaim excess deductions, or a business that does both, Hulljady provides a fully managed CIS service that covers every obligation.
Subcontractor Verification
Before making any payment to a subcontractor, contractors must verify them with HMRC to establish the correct deduction rate — 0% for gross payment status, 20% for registered subcontractors, or 30% for unverified. We carry out all verifications on your behalf and maintain a complete record for every subcontractor on your books.
Monthly CIS Returns
Contractors must file a monthly CIS return with HMRC by the 19th of each month, detailing every payment made to subcontractors in the previous tax month. We prepare and submit every return accurately and on time — and handle the nil return submissions for months where no payments are made.
CIS Deduction Statements
Contractors are legally required to provide each subcontractor with a written payment and deduction statement every month a payment is made. We produce compliant, professional deduction statements for every subcontractor on your behalf.
Gross Payment Status Applications
Gross payment status allows subcontractors to receive payments in full without deduction, significantly improving cash flow. We assess your eligibility — based on your turnover, tax compliance, and business structure — and manage the application to HMRC on your behalf.
CIS Reclaim for Subcontractors
If you are a subcontractor having CIS deductions taken from your payments, those deductions are credits against your tax liability. We ensure they are correctly offset against your corporation tax or Self Assessment bill — and where you have overpaid, we pursue the repayment from HMRC promptly.
CIS Compliance Reviews
If you have been running CIS in-house and are unsure whether your processes are correct, we carry out a full compliance review — checking verification records, return accuracy, deduction statements, and HMRC correspondence — and put right anything that needs fixing before it becomes a problem.
KEY FIGURES
KEY RATES & DEADLINES
CIS rates and deadlines you need to know
The Construction Industry Scheme operates on tight monthly deadlines and specific deduction rates. Missing either has direct financial consequences.
Gross Payment Status — 0% deduction Subcontractors who have passed HMRC’s turnover, compliance, and business tests can receive payments in full. Status is reviewed annually by HMRC and can be withdrawn if compliance slips.
Standard CIS Deduction — 20% Applied to registered subcontractors who have not qualified for gross payment status. Deducted from the labour element of payments only — not materials.
Higher CIS Deduction — 30% Applied to subcontractors who cannot be verified with HMRC — typically because they are not registered for CIS or have not provided the correct details. This rate is significantly more painful for cash flow and should be avoided.
Monthly Return Deadline — 19th of each month CIS returns must reach HMRC by the 19th of each month for the previous tax month. The first penalty for a late return is £100, rising to £200 after two months, £300 after three months, and then tax-geared after 12 months.
Note: The materials deduction exclusion is commonly misapplied. CIS deductions apply to the labour element of a subcontractor’s invoice only — not to the direct cost of materials. However, this distinction requires careful documentation and a clear paper trail. Hulljady ensures your deductions are calculated correctly on every payment.
WHY IT MATTERS
Why getting CIS right matters more than most contractors realise
CIS is not simply a paperwork exercise. The deductions you make, the verifications you carry out, and the returns you file directly affect your subcontractors’ tax positions — and your own liability if something goes wrong. HMRC treats CIS errors seriously, and the penalty regime reflects that.
Contractor liability — Real
If you pay a subcontractor without verifying them correctly with HMRC, you become liable for the deductions that should have been made — even if the subcontractor has since disappeared. Getting verification right is not optional.
Cash flow — Protected
Subcontractors on gross payment status keep their full invoice amount. Those deducted at 20% or 30% can reclaim the excess at year-end — but only if their returns are filed correctly and on time. Hulljady ensures nothing is left on the table.
Penalty exposure — Eliminated
Late CIS returns attract automatic penalties starting at £100 per month. Persistent non-compliance can trigger tax-geared penalties and HMRC compliance checks. Our managed service means you will never file late.
Year-end reconciliation - Clean
A clean CIS record throughout the year means your year-end accounts, corporation tax return, and Self Assessment are straightforward — no scramble to reconcile deductions, no missing statements, no HMRC queries.
HMRC actively cross-references CIS monthly returns against subcontractors' Self Assessment and corporation tax returns. Discrepancies trigger automatic flags. Hulljady ensures your returns are accurate from day one so there is nothing to flag.
WHY HULLJADY
CIS expertise backed by chartered accountancy
CIS does not exist in isolation. Your monthly returns feed directly into your year-end accounts, your corporation tax computation, and — for sole traders — your Self Assessment. Errors or omissions in your CIS records create problems that ripple through every other part of your tax affairs.
At Hulljady, your CIS returns are managed by the same team that handles your accounts and tax returns. Nothing is siloed. Nothing is duplicated. And when your year-end comes around, the numbers already add up.
- HMRC-registered agent — we deal with CIS queries and correspondence directly
- Monthly returns submitted on time without exception
- Deduction statements produced and distributed to every subcontractor
- CIS records integrated with your bookkeeping and management accounts
- Gross payment status applications handled from eligibility assessment to approval
- Proactive alerts when subcontractors’ verification status changes
COMMON QUESTIONS
CIS returns — frequently asked questions
Who needs to register for CIS?
Any business that operates as a contractor in the construction industry — meaning it pays subcontractors for construction work — must register for CIS before making its first payment. Subcontractors who receive payments from contractors should also register, or they will be deducted at the higher 30% rate rather than the standard 20%. Registration does not happen automatically when you set up a business — it requires a specific application to HMRC, which Hulljady can handle on your behalf.
What counts as construction work for CIS purposes?
CIS applies to a broad range of activities beyond traditional building work. It covers site preparation, demolition, installation of systems (heating, lighting, power), internal fitting out, repairs and alterations, decorating, and cleaning following construction. It does not apply to professional services such as architecture, surveying, or delivery of materials. Where a business carries out both CIS and non-CIS work, it is important to clearly separate the two in your records.
What is the difference between a contractor and a subcontractor under CIS?
A contractor is any business that pays others to carry out construction work — including businesses outside the construction industry that spend more than £3 million on construction in any 12-month period. A subcontractor is any individual or business that carries out construction work for a contractor. Many businesses in the construction sector are both simultaneously — engaging their own subcontractors while working as a subcontractor for a main contractor above them.
Can a limited company apply for gross payment status?
Yes. Limited companies, partnerships, and sole traders can all apply for gross payment status, provided they pass HMRC's three tests — the business test, the turnover test, and the compliance test. The turnover test requires net construction turnover of at least £30,000 per year for sole traders, or £30,000 per director for companies. The compliance test requires a clean tax record with no late returns or outstanding payments. Hulljady assesses your eligibility and manages the application.
What happens if I forget to file a monthly CIS return?
An automatic penalty of £100 applies immediately for a return that is one day late. This rises to £200 after two months, £300 after three months, and to the greater of £3,000 or 100% of the CIS deductions shown on the return after 12 months. HMRC does not need to issue a warning before charging these penalties — they are automatic. If you have missed returns in the past, Hulljady can bring everything up to date and, where appropriate, make representations to HMRC for penalty mitigation.
How does a subcontractor reclaim CIS deductions that have been over-deducted?
CIS deductions made by contractors are credited against the subcontractor's own tax liability — against corporation tax for limited companies, or against income tax and Class 4 NI for sole traders. Where deductions exceed the tax due, the balance is repayable by HMRC. For limited companies this is offset through the corporation tax return. For sole traders it comes through the Self Assessment return. In both cases, it is essential that the deduction statements received from contractors are retained and reconciled carefully — a task Hulljady manages as part of our standard subcontractor service.
READY TO GET STARTED?
Stop letting CIS paperwork slow your business down.
Book a free, no-obligation consultation with one of our chartered accountants. We’ll review your current CIS obligations, identify any compliance gaps, and give you a fixed-price quote for taking it completely off your hands.