How do CIS returns work? It’s one of those questions that a lot of subcontractors don’t get a straight answer to until something goes wrong.

What Is a CIS Return, Exactly?

CIS stands for Construction Industry Scheme. It’s a system HMRC set up specifically for the construction industry to make sure tax gets collected from subcontractors at source, rather than relying on everyone to sort it out at the end of the year. Think of it a bit like how an employer deducts income tax before paying a member of staff, except here it’s a contractor deducting from a subcontractor.

The CIS return itself is a monthly document that the contractor files with HMRC. It tells HMRC who the contractor has paid, how much, and how much tax has been deducted. If you’re a subcontractor, you don’t file the return, but the figures in it directly affect your tax position.

Who Files It and When Does It Have to Go In?

The contractor files the CIS return, not the subcontractor. If you’re working under a main contractor on a construction job, it’s their responsibility to send the return to HMRC each month. The deadline is the 19th of each month, covering the previous tax month.

If the contractor misses that date, HMRC charges a penalty from the day after. As a subcontractor, that’s not your problem directly, but it can cause issues if the return contains your deduction details and it’s late or wrong. That matters when you try to reclaim what you’re owed.

What the Deductions Actually Mean for You as a Subcontractor

When a contractor pays you under CIS, they’re required to deduct either 20% or 30% from the labour portion of your invoice before paying you, depending on your registration status with HMRC. That money goes to HMRC on your behalf. You’ll see it shown on a statement that the contractor should give you each month.

At the end of the tax year, you can claim those deductions back through your self assessment tax return. If more has been deducted than you actually owe in tax, HMRC will refund the difference. That said, I see plenty of cases where the deductions on a subcontractor’s statement don’t match what the contractor actually filed. That mismatch can delay or reduce your refund, which is genuinely painful for cash flow.

What to Do If Your CIS Deductions Don’t Add Up

If the numbers on your CIS statements don’t match what you were expecting, it’s worth getting it looked at sooner rather than later. Contractor errors in CIS filings are more common than most people realise, and they can leave you chasing HMRC for money that should have been straightforward to reclaim.

The best starting point is to compare your monthly CIS statements against your invoices and check the maths on the deductions yourself. If you’re not sure where the discrepancy is, bring it to a bookkeeper who knows CIS. I work with subcontractors across Suffolk on exactly this kind of thing, and wherever you’re starting from, there’s always a way to get it straightened out.