If you build it, you’ve got to report it. That’s the short version of the Construction Industry Scheme (CIS) – but anyone who has wrestled with CIS returns will know the real story can feel far longer. Monthly filing, deduction statements, gross-payment status checks, offsets against PAYE and cashflow worries can all crop up before you’ve even priced the next job. We hear it every week from contractors across County Durham and beyond: “I’m flat out on site, why does CIS paperwork have to land right in the middle of my month?”
The straight answer is that HMRC wants its slice on time. For 2025/26, the deduction rates remain 20% for verified subcontractors and 30% for those who are not registered, while contractors approved for gross payment keep the lot until self-assessment. Miss a filing or pay late and the automatic penalties start at £100, rising fast. Little wonder 27% of small construction firms told the ONS they lost at least one day’s work a month chasing tax admin (ONS, 2024). Yet, as we keep telling the lads and lasses around Consett, CIS returns don’t have to be a monthly migraine. With the right process, the hassle melts away – and that’s exactly what this guide lays out.
Why CIS returns matter for trades in 2025/26
Paying subcontractors is only half the job. Under CIS you act as unpaid tax collector – a role HMRC takes seriously. Last year alone it issued over 310,000 late-filing notices to contractors (HMRC, 2025). Each notice chips a bit more out of profit and confidence. More importantly, if you are angling for bigger contracts, a clean compliance record is fast becoming a must-have. Main contractors and local authorities now bake “no outstanding CIS penalties” clauses into tender packs as standard. Staying on top of CIS returns protects your reputation as much as your wallet.
Avoid CIS returns penalties before they bite
Fines pile up because problems aren’t spotted early. Keep these danger zones front of mind:
- Missed deadlines: CIS returns run on tax months – 6th to 5th – and must hit HMRC by the 19th. Friday afternoon log-ins are risky; file by the 17th instead.
- Wrong deduction rate: 20% for verified subs, 30% if they’re not in CIS. Verify every new subcontractor before the first payment: HMRC verification service.
- Late payment of deductions: Send the withheld tax to HMRC by the 22nd if paying electronically.
- Poor record-keeping: Store payment and deduction statements for at least three years.
Those four steps sound basic, but skipping any of them is exactly how the £100 penalty train leaves the station. Put them in your diary, automate reminders, or better yet, let us do the shouting.
Getting the monthly routine right
Over the years, we’ve built a four-step rhythm that keeps our CIS clients stress-free:
- Pre-payment verification
The minute you line up a new subbie, we run the HMRC check. Most verifications ping back in seconds. If it’s 30%, we’ll tell you before the first invoice lands. - Weekly ledger updates
Every Friday – after the kettle’s on – we import your timesheets or invoices into our cloud bookkeeping system. That means the numbers are ready for the return long before deadline week. - CIS return filing
On the 16th of each month we draft the return and shoot you a quick approval email. One click from your phone and we transmit it through our agent portal. Job done. - Payment and statements
We generate subcontractor deduction statements and a single PAYE reference for the tax you owe. All you have to do is schedule the bank payment by the 22nd. Cashflow stays predictable and the revenue stays quiet.
Contractors who follow this routine save an average of 6.5 admin hours a month – time better spent winning the next job (OBR, 2025).
Keeping your records clean and digital
Paper folders still work, but they slow you down when HMRC comes asking. Digital records pay off in three ways:
- Real-time visibility: Live software dashboards flag approaching CIS deadlines alongside VAT and payroll.
- Easier gross payment status: HMRC expects spotless records for 12 months before it grants or renews gross status. Digital trails make that box tick itself.
- Quicker HMRC queries: If the inspector calls, you can export every statement and ledger in minutes, not days.
We recommend Xero, FreeAgent or QuickBooks; all integrate with our CIS returns workflow. If spreadsheets feel safer, that’s fine – we’ll hook them in behind the scenes and tidy them up. Either way, your cashflow forecast stops lurching from feast to famine.
How we keep Consett builders stress-free
At For The Trade our roots are in the north-east building game. We know the price of a wasted morning on the A692 – and the price of HMRC letters dropping through the yard office door. That’s why our CIS service is built around:
- Plain-English support: If you ring, you get one of our team, not a call centre script. Need a visit on site? We’ll bring the hi-vis.
- Fixed fees: You pay a simple monthly rate that covers every CIS return, no surprise extras.
- Regional insight: We talk daily to suppliers, planners and quantity surveyors across County Durham – when regs and rates shift, you hear it first.
- Growth mindset: Our own expansion plans mean we’re always looking for smarter tech and wider advisory skills. The tool-box never stops growing, and our clients grow with it.
Check out our CIS returns pages for the full breakdown, or give Jordan a buzz if you fancy a cuppa and a chat about the numbers.
Ready to make CIS painless?
Missing a CIS deadline once stings – missing it twice can snowball into penalties, damaged cashflow and restless subcontractors. Yet, with a clear checklist, the right software and a partner who lives and breathes CIS returns, the monthly ritual becomes a five-minute tick-box. Think of the hours you’ll win back on site, the bids you can polish and the sleep you’ll enjoy when the 19th wanders by without a paper storm on your desk.
If you’d like your CIS returns handled by a team that speaks your language – and occasionally brings Greggs to the meeting – drop us a line through our contact page. We’ll keep the taxman happy while you keep the bricks and blocks moving.