Construction Industry Scheme · Doncaster
CIS accountants in Doncaster.
Monthly returns filed on time, deductions worked out on the right figure, and refunds claimed for subcontractors who've had too much taken off — which is most of them.
The short version
If you pay subcontractors, you're a contractor: verify them, deduct the right amount, file a return by the 19th every month and pay HMRC by the 22nd. Miss a return and it's £100 immediately, whether you paid anyone or not.
If you get paid under CIS, 20% comes off your labour with no personal allowance applied — so most subcontractors have overpaid by the year end and are owed money back.
CIS deduction calculator
Deductions come off the labour only. Materials the subcontractor supplied come out first, and everything is worked out on the VAT-exclusive figure.
Deduction to hand to HMRC
£600
A guide, not a substitute for checking the invoice. Only genuine materials the subcontractor paid for come out — you can't strip out labour by calling it something else, and HMRC does look.
The three rates
| Status | Deducted from labour | Who |
|---|---|---|
| Registered | 20% | Most subcontractors, once they've registered with HMRC |
| Not registered | 30% | Anyone who hasn't registered — an expensive way to save a phone call |
| Gross payment status | 0% | Larger, well-established subcontractors who meet HMRC's turnover and compliance tests |
The difference between 20% and 30% is real money sitting with HMRC for up to a year. If you're a subcontractor and you're being paid at 30%, registering is the single most profitable phone call you can make this week.
What the deduction is actually taken from
Not the whole invoice. The deduction applies to the labour element only — the total, less genuine materials the subcontractor has paid for, and always calculated before VAT.
A registered electrician, £4,500 plus VAT
The £600 goes to HMRC and counts as an advance payment against the subcontractor's tax and National Insurance — it isn't a charge, it's their money held early.
What you have to do as a contractor
- Register with HMRC as a contractor before you pay your first subcontractor.
- Verify every subcontractor with HMRC before you pay them, so you deduct at the right rate.
- Deduct the right amount from the labour element and pay it over.
- File a monthly return by the 19th, covering the tax month that ended on the 5th.
- Pay HMRC by the 22nd if you're paying electronically, or the 19th by post.
- Give each subcontractor a payment and deduction statement so they can prove what's been taken.
- File a nil return in any month you paid nobody. This is the one that catches people.
You're also a contractor if you're not in construction at all but spend more than £3 million on construction work in a 12-month period — which catches property companies and larger businesses doing a big fit-out.
Why you're probably owed a refund
CIS takes 20% off your labour from the first pound. It takes no account of your personal allowance, your expenses, your van, your tools or your materials. So by the end of the tax year most subcontractors have paid substantially more than they owed.
You get it back through your Self Assessment return — the CIS deductions are set against the tax you actually owe, and the difference is repaid. It's not a windfall or a loophole. It's your money coming home.
- Register with HMRC if you haven't — being unregistered costs you 30% instead of 20%.
- Keep every payment and deduction statement. They're the evidence for the refund.
- Keep receipts for tools, materials, fuel and protective gear. These reduce the tax owed and increase what comes back.
- File early. Refunds are paid after the return goes in, so filing in May rather than January means the money arrives eight months sooner.
What late returns cost
| How late | Penalty |
|---|---|
| 1 day | £100 |
| 2 months | £200 |
| 6 months | £300, or 5% of the CIS deductions — whichever is more |
| 12 months | £300, or 5% again — whichever is more |
| Over 12 months | Potentially up to £3,000 or 100% of the deductions in the worst cases |
These stack per return. Miss six months of returns and you're looking at six separate penalties, not one — which is how a small oversight turns into a four-figure problem.
How we help
- Contractors: subcontractors verified, deductions calculated, returns filed every month, statements issued, and nil returns never forgotten.
- Subcontractors: records kept straight, expenses captured properly, return filed early and the refund chased.
- Both: the accounts, the VAT and Making Tax Digital alongside it, so it's one firm rather than three.
- Behind on returns? We'll work out where you stand and get you caught up. It's more common than you'd think.
Get the paperwork off your Sunday nights.
A short call, no obligation, and a written quote the same working day. Tell us how many subs you pay, or how long you've been having 20% taken off, and we'll tell you what it takes.
Message us on WhatsAppCall 07868 005731
Or email whitfieldandhanson@gmail.com — we reply the same working day.
- Monthly CIS returns filed, on time, every month
- Nil returns handled so the £100 never lands
- Refunds claimed for subcontractors
- Late returns caught up without the lecture
- HMRC-registered agents — we deal with them
- Doncaster based, and we know the local trade
Common questions
Is CIS taken off the whole invoice?
No. Only the labour element, after genuine materials the subcontractor paid for are taken out, and always on the figure before VAT. On a £4,500 invoice with £1,500 of materials, a registered subcontractor has £600 deducted, not £900.
Am I owed a CIS refund?
Very often, yes. The 20% comes off from the first pound with no personal allowance and no expenses taken into account, so by the year end most subcontractors have overpaid. It comes back through your Self Assessment return.
Do I have to file a return in a month I paid nobody?
Yes — a nil return. And missing one costs the same £100 as missing a real one. It's the most common CIS penalty we see and the easiest to avoid.
What's the difference between 20% and 30%?
Whether you're registered with HMRC. Unregistered subcontractors have 30% taken instead of 20%, and get the difference back only when they file. Registering takes minutes and is worth doing today.
What is gross payment status and can I get it?
It means being paid with nothing deducted at all, and it's for subcontractors who meet HMRC's turnover and compliance tests. It's a real cash-flow advantage if you qualify — worth a conversation about whether you're close.
When exactly do I have to pay HMRC?
By the 22nd of the month if you pay electronically, or the 19th if you're paying by post. The return itself is due by the 19th either way.
I'm months behind on CIS returns. What now?
Get them filed, in order, as soon as you can — the penalties stack per return and stop growing once the returns are in. We do catch-up work regularly and nobody here is going to make you feel daft about it.
Does CIS income count for Making Tax Digital?
Yes. It's turnover from self-employment, so it counts towards your qualifying income in full — before any CIS deduction and before expenses.
Related
General guidance, not advice. Rates, deadlines and penalties as they stand on 12 August 2026. Not advice for your circumstances — check anything important against GOV.UK or ring us.
Sources: HMRC Construction Industry Scheme guidance and CIS monthly return penalties (GOV.UK). Reviewed by Henry Hanson, HMRC-registered agent.