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HMRC internal manual

Construction Industry Scheme Reform Manual

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HM Revenue & Customs
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Register and maintain contractor: overview: the monthly return

CISR31600 Action guide contents
   

General

This section serves as an introductory overview of contractor returns. For deeper coverage see CISR60000 Monthly Returns.

Contractors must make a return to HMRC every month showing the payments made to all subcontractors, whether paid gross or under deduction at the standard or higher rate. The return period covers an income tax month - which is from the 6th of one month to the 5th of the next.

Issue of the pre-populated Return

In most cases the return will be automatically generated and sent out by the CIS system. The process will run over the following cycle:

  • 24th of the month - CIS system automatically generates returns that are needed for the previous return period (6th of the current month to the 5th of the next) and prints these in batches.
  • 29th of the month - all returns automatically generated - to be issued by this date.
  • 5th of the following month - (returns issued by the 29th above) to be received by the contractor.
  • 19th of the same month - due date for returns for the income tax month just ended (6th of the previous month to 5th of the current) to be submitted to HMRC.

The contractor return will be populated with details of the contractor scheme and details of any subcontractors shown on earlier returnsor verified by the contractor within the previous three months. It will then be issued by the preferred method of contact to the contractor.

Issue of manual returns

Although most returns will be generated and issued automatically by the CIS system, there will be occasions when you will be asked to issue one manually. This includes the following reasons,

  • A contractor (or an agent) needs a replacement of a pre-populated return because they have made an error on the original return, and it is too late for one to be issued by the CIS system.
  • A contractor (or an agent) needs a replacement of a pre-populated return because they have lost or mislaid the original return, and it is too late for one to be issued by the CIS system.
  • A contractor (or an agent) who usually files electronically or on line is unsuccessful because of a hardware or software problem.
  • A contractor (or an agent) starts paying subcontractors for the first time after a period of inactivity, and it is too late for one to be issued by the CIS system.
  • A new contractor (or an agent) contacts you to say that they have started paying subcontractors for the first time, and it is too late for one to be issued by the CIS system.

A stock of forms CIS300(Man) and CIS300CS(Man) should be held in each

  • Contact Centre (CC)
  • Network Office
  • And anywhere else where a call from a contractor for a manual version of the monthly return may be requested.

Printer Friendly Returns/Continuation Sheets

This applies to contractors who were (prior to 6 April 2007) using software to print CIS vouchers and substitution continuation sheets for their annual return. These contractors will have advised HMRC (the Helpline) that it will pose problems for them to submit their monthly returns information either by ‘paper’ or online. They will be sent a supply of manual return forms and Printer Friendly Continuation Sheets (PFCS) for a maximum of 3 months. The contractor will need to contact the Helpline again after the 3 months are up if they wish to extend the agreement.

The Helpline advisor will enter the period when it is agreed to allow the use of PFCS within Update Customer. The entry of a date in this field will prevent the issue of pre-populated returns until the date has passed.

Periods of temporary inactivity

This will occur when a contractor ceases to engage and pay subcontractors in a particular month. If a contractor has not paid any subcontractors in a certain month they must still submit a ‘Nil’ return. This is because without a ‘Nil’ return we would not be able to distinguish between a contractor that had not paid anybody in the period and a contractor who simply failed to make returns.

However, contractors who anticipate that they will not be paying any subcontractors in the next six months can indicate as such on the CIS300 return. The issue of the monthly return will then be suspended for six months as long as the contractor returns are up to date in both the current and the previous year. If they are, then an ‘inactivity’ signal will be set on the CIS record at the time the return is logged. For information on setting and unsetting the Inactivity signal see CISR67630. If the situation changes during that time and the contractor begins to pay subcontractors again they must either phone the CIS helpline or write to their HMRC office letting them know so that the issue of the monthly return is recommenced.