What is the penalty for not filing a CIS nil return?

The Construction Industry Scheme (CIS) requires contractors to file a monthly return with HMRC by the 19th of each month. This applies even if you made no payments to subcontractors that month — in that case you must file a 'nil return'.

Late filing penalties:

• 1 day late: £100
• 2 months late: £200
• 6 months late: £300 or 5% of the CIS deductions that should have been shown (whichever is higher)
• 12 months late: A further £300 or 5% of deductions (whichever is higher)

These penalties are cumulative, so a return that's 12 months late could attract £900+ in penalties before HMRC looks at the deductions element.

Important: You can appeal against penalties if you have a reasonable excuse (illness, bereavement, HMRC system failure). But 'I forgot' or 'I didn't know' rarely qualifies.

• You didn't use any subcontractors that month
• You used subcontractors but they were all employed directly (PAYE, not CIS)

How to file a nil return: You can file online via your HMRC CIS online account. It takes under a minute. Set a calendar reminder for the 19th of each month.

• Assuming no payments = no return needed
• Not registering as a contractor (triggering missed return penalties from the registration date)
• Mixing up contractor and subcontractor obligations

If you've missed returns and penalties have built up, contact HMRC promptly. They have a process for agreeing a payment plan and waiving penalties in appropriate cases.