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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: CIS: contractor's response: contractor advises that return is nil

Capturing nil returns

If the contractor advises that a return should be a nil declaration, no payments either gross or net were made to subcontractors, ask the contractor to phone the CIS Helpline on 0300 200 3210 and they will log a nil return.

If any payments have been made to subcontractors in the return period the contractor must complete a CIS return. It cannot be a Nil CIS return if payments have been made even if no deduction of tax were made.

Regulation 4(10) of The Income Tax (Construction Industry Scheme) Regulations 2005 has been amended from 6 April 2015 so that a contractor that has not made any payments under a construction contract is no longer obliged to submit a nil return to HMRC.

After 6 April 2015, if contractors do not make any payments to subcontractors in a tax month they must still notify HMRC in order to avoid a CIS late-filing penalty notice and a CIS specified charge. HMRC will encourage contractors to file a nil return on a voluntary basis or they can call the CIS Helpline to let us know that no return is due.

Where a penalty is issued because the contractor did not notify HMRC that no subcontractors were paid in the tax month, the contractor can appeal; see DMBM524220. If they tell us that they made no payments to subcontractors in that tax month the appeal will be accepted and a ‘nil return’ will be recorded on CISR. This will also be notified to ETMP any CIS specified charge will be cancelled.

Under HMRC’s Collection and Management powers, we intend this change to apply also to any penalties issued for nil returns that were due prior to 6 April 2015. It is important to note, however, that nil returns for months up to and including 5 April 2015 are still required to be made, where appropriate, but any CIS penalties that are issued in respect of late or non-filing of these returns will be cancelled on appeal. Repayment of any penalties already paid in respect of nil returns due on or before 5 April 2015 will not be made.

Noting IDMS records

On IDMS use RECORD ACTIONS:

  • select appropriate
  • select Other
  • make a FURTHER INFORMATION note ‘Nil return referred to CIS Helpline’
  • set a new BF date for three days later.