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HMRC internal manual

Construction Industry Scheme Reform Manual

Monthly returns: overview: introduction

One of the strategic aims of CIS is to reduce the regulatory burden on the construction industry. This has been achieved in part, by the removal of the voucher paper trail used in the old scheme up to 5 April 2007.

But we still need to know about the payments made by contractors to their subcontractors. So, from 6 April 2007 CIS places an obligation on Contractors to make a monthly return. Every contractor who makes payments to subcontractors in respect of construction operations must send a single monthly return (CIS300) with details of all of these payments to HMRC every month. The return period covers an income tax month - that is, from the 6th of one month to the 5th of the next.

The Monthly Return will include details of all payments made to subcontractor’s in respect of construction operations, including:

  • Payments made gross
  • Payments made under deduction at the standard rate.
  • Payments made under deduction at the higher rate.

The automatic generation and issue of the monthly return typically runs over the following cycle:

  • 5th of the month. This is the end of the reporting period. Returns generated and issued by the 29th of the month just ended should have been received by Contractors.
  • 6th of the month. This is the start of the reporting period.
  • 19th of the month. This is the due date for returns for the income tax month just ended (6th of the previous month to 5th of the current).
  • 24th of the month - CIS system automatically generates returns that are needed for the next return period (6th of the current month to 5th of the next) and prints these in batches
  • 29th of the month - all returns automatically generated to be issued by this date so as to ensure that they are received by the 5th of the following month.

The example in CISR61020 shows a typical contractor return process.