What is CIS300 and when do I file it?
CIS300 is the monthly return UK contractors file under the Construction Industry Scheme. Who needs to file, what's in it, deadlines, and penalties.
CIS300 is HMRC's monthly return for UK contractors paying subcontractors in construction. It declares how much you paid each subbie, how much CIS you deducted, and totals for the tax month. Due by the 19th of the month after the tax month-end.
Who has to file CIS300?
Any UK business that pays subcontractors for construction work is a contractorfor CIS purposes and must register with HMRC. That includes:
- Construction companies hiring subbies
- Property developers paying contractors
- Mainstream businesses spending >£3m/year on construction (the "deemed contractor" rule)
- Even some property landlords if they refurbish
If you're a subcontractor being paid under CIS, you don't file CIS300 — the contractor paying you does. But you should register as a subcontractor with HMRC to ensure you're deducted at 20% (not 30%).
What's in a CIS300?
For each tax month, you declare:
- Each subcontractor you paid (by UTR + name)
- The gross amount of labour paid
- Materials portion (not deducted)
- The deduction rate applied (0, 20, or 30%)
- The deduction amount withheld
- Whether they're verified
The deduction itself is paid to HMRC separately by the 22nd of the same month (electronic payment).
Tax months — why they're weird
CIS doesn't use calendar months. A tax month runs 6th to the 5th:
- Tax month to 5 May covers payments made 6 April – 5 May
- That return is due by 19 May
- Payment of withheld CIS due by 22 May (electronic) or 19 May (postal)
This catches people out. The 5th-to-the-6th cutoff means a subcontractor invoice paid on 4 May falls into a different return than one paid on 6 May.
Deduction rates
Three possible rates, set by HMRC when you verify each subbie:
| Rate | When it applies |
|---|---|
| 0% (gross payment status) | Subcontractor passes HMRC's business/turnover/compliance tests. Paid the full gross amount. |
| 20% | Subcontractor is registered + verified with HMRC. The standard rate. |
| 30% | Subcontractor isn't verified or you couldn't verify them. The penalty rate — and HMRC will assume this if you don't check. |
Verification — the critical step
Before you pay a subbie for the first time, you must verify them with HMRC. You call or use HMRC's online service with their UTR + NI number (or company number). HMRC tells you:
- Whether they're registered for CIS
- What deduction rate to apply
- A unique verification number to record
Verifications are valid for 2 years for that subcontractor. If you don't verify, HMRC defaults you to 30% — which the subcontractor will not appreciate.
Labour vs materials
CIS only deducts on the labour portion of a payment. Materials are excluded. If a subbie invoices you £1,200 — £800 labour + £400 materials + £240 VAT (on the labour) — your CIS deduction at 20% is:
£800 × 20% = £160 CIS withheld. You pay subbie £1,200 − £160 = £1,040. The £160 goes to HMRC by the 22nd of next month.
Materials must be genuine — i.e. materials the subbie bought specifically for your job. Plant hire, fuel, and similar consumables are labour for CIS purposes. Getting the labour/materials split right matters: HMRC audits this.
Penalties
Late CIS300 filing is one of HMRC's most punitive penalty regimes:
- 1 day late: £100
- 2 months late: £200
- 6 months late: £300 or 5% of CIS deducted (whichever higher)
- 12 months late: another £300 or 5%
- Plus interest on unpaid amounts
Multiple late returns stack. A contractor who misses 6 monthly returns can rack up thousands in penalties before they realise. The fix is process: get the cadence in place, file the nil returns even if you didn't pay any subbies, and don't skip a month.
Nil returns matter
If you paid no subcontractors in a tax month, you still need to file a nil return. Skipping is treated as late filing and incurs the same £100+ penalty. Most contractor admin time goes on this — filing nil returns to avoid penalties — which is one of the things Ledgers' automation removes entirely.