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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: construction industry scheme (CIS): scheme overview: CIS - from 6 April 2007 - contractor returns

From 06-04-07 a contractor must make a monthly return to HMRC of all

  • payments made to subcontractors in the tax month and
  • deductions made from those payments.

The return must be received by HMRC no later than the 19th of month. For example the return for the tax month 6th November 2007 to 5 December 2007 must be received by 19th December 2007.

A contractor who has not made any payments to subcontractors in the month nor made any deductions must still submit a NIL return.

If the contractor

  • will not be making payments to subcontractors for the next 6 months and
  • notifies HMRC that this is the case
  • a NIL return will not be required.

A contractor who fails to make a return by the due date may become liable to a penalty. COG914000.

As well as details of payments and deductions the return contains declarations in relation to the employment status and verification of the subcontractors named on it. The caseworker must

  • confirm that the declarations are completed and correct

A contractor who fails to make a declaration or makes an incorrect declaration may become liable to a penalty. COG914000.

The caseworker must also confirm that all

  • payments to subcontractors have been entered on the return and
  • deductions made have been entered on the return

Where amounts have been omitted the caseworker must

  • take action to recover the underpayment (COG915000) and
  • consider penalties for an incorrect return (COG914000).