Construction Industry Scheme (CIS) is one of HMRC’s most strictly enforced tax regimes. Miss a single monthly return and the consequences can snowball fast, and a small oversight can turn into thousands of pounds in penalties. In the worst cases, it can put your Gross Payment Status (GPS) at risk. At Tax Driven Accountants, we’re sharing our expertise and guidance from the perspective of a CIS accountant to help contractors stay fully compliant, so you never have to find out the hard way what a missed deadline costs.
Visit our CIS Contractors page to enquire about these services in more detail.
The key dates every CIS accountant tracks
Every contractor registered under CIS has to file a monthly return, even in months where nothing happened. Here’s how the timeline works.
- The reporting period: Each CIS monthly return (form CIS300) covers activity from the 6th of one month to the 5th of the next.
- The filing deadline: Your return is due by the 19th of every month, regardless of when your reporting period ended.
- The payment deadline: Any CIS deductions owed to HMRC must be paid by the 22nd of the month if you’re paying electronically, or the 19th if paying by cheque or post.
The “Nil Return” trap
If you didn’t pay any subcontractors in each tax month, you still must file a Nil Return by the 19th. Skip it, and HMRC’s system will automatically issue a late filing penalty. There’s no exemption just because no money changed hands.
| Tax month period | Filing deadline | Payment deadline |
| 6th of the month – 5th of the next | 19th of the month | 22nd (electronic) / 19th (cheque or post) |
What happens if you file late? Breakdown from a CIS accountant
HMRC’s CIS penalties escalate the longer a return stays outstanding, and they’re issued automatically with no warning email being delivered first.
The penalties for late filings include:
- 1 day late: A fixed £100 penalty, issued automatically as soon as the 20th of the month arrives
- 2 months late: An additional £200 penalty on top of the first
- 6 months late: A further £300, or 5% of the CIS deductions shown on the return (whichever figure is higher)
- 12 months late: Another £300 or 5% of CIS deductions. However, if HMRC believes you deliberately withheld information, this can rise to £3,000, or 100% of the deductions due.
Avoid losing Gross Payment Status
Persistent late filing doesn’t just cost money, as it also triggers a compliance review from HMRC (known as a CIS308 notice).
If your record doesn’t stack up, HMRC can revoke your Gross Payment Status, meaning contractors start deducting tax from your payments again. For many businesses, that hit to cash flow is far more damaging than the penalties themselves.
Step-by-step: How a CIS accountant will appeal a late filing penalty
If you’ve been hit with a penalty, you may still have a route to get it cancelled. Here’s how to approach it.
Step 1: Check the 30-day window
You must submit your appeal within 30 days of the date printed on the penalty notice, not the date you happened to open the letter or email. Miss this window and HMRC is far less likely to consider your case.
Step 2: Determine if you have a “reasonable excuse”
HMRC will only accept an appeal if you can show a genuine, evidenced reason why the return couldn’t be filed on time.
Excuses HMRC is likely to accept:
- Serious illness
- Bereavement
- An outage on HMRC’s own systems
- Postal delays caused by unexpected disruption
- A computer or software failure that struck right before submission.
Excuses HMRC is likely to reject:
- “I forgot”
- “My software wasn’t working” (without any supporting evidence)
- Relying on an agent who failed to file, unless you can show you took reasonable care to check they had.
Special case (Nil returns): If your penalty relates to a month where you made no payments to subcontractors, simply filing the Nil Return and notifying HMRC will usually get the penalty automatically cancelled. A CIS accountant can help with this.
Step 3: Submit your appeal (Online or via post)
You have two options, and CIS accountants can also handle this on your behalf.
- Online: Appeal through HMRC’s PAYE/CIS Online Penalty Appeal Service (PAS), using the Unique ID printed on your penalty notice.
- By post: Write formally to HMRC, quoting your UTR (Unique Taxpayer Reference) and the penalty reference number.
Step 4: File the missing return first
Always submit the outstanding return before, or at the same time as, your appeal. HMRC will automatically reject an appeal for a return that’s still outstanding.
Need help from a CIS accountant in your appeal process?
Appeals are time-sensitive, and getting the reasonable excuse and evidence right first time gives you the best chance of a successful outcome.
A CIS accountant, like those in our team at Tax Driven Accountants, can review your penalty notice, prepare your appeal, and deal with HMRC directly on your behalf.
Get in touch to talk through your penalty and next steps.
Why CIS compliance needs a specialist CIS accountant, not just bookkeeping software
General-purpose bookkeeping tools often struggle with the finer points of CIS, such as reverse charge VAT, subcontractor verification, and the difference between gross and net payment status can trip up even well-organised contractors.
What a dedicated CIS accountant will do for you:
- Automate verification of subcontractors with HMRC
- Ensure timely preparation and submission of your monthly returns, so deadlines are never missed
- Manage your monthly deduction statements (CIS vouchers) for subcontractors
- Provide fast, professional representation if you need to appeal an HMRC penalty or protect your Gross Payment Status.
Overwhelmed by CIS returns or facing HMRC penalties?
Let our expert CIS accountants handle the paperwork so you can focus on running your business.
Contact us on 0800 999 1800 or send us an enquiry.
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