CIS accounting

CIS compliance and contractor accounting for main contractors.

Main contractors sit at the centre of every CIS supply chain. You verify subcontractors before the first payment, file CIS300 returns by the 19th every month, issue deduction statements within 14 days and, since 6 April 2026, carry a materially tougher exposure if anything in your supply chain goes wrong. The obligations scale with the number of subcontractors you engage: a contractor paying 20 subbies across three sites in a month has 20 verification records, 20 deduction statements and one CIS300 to file, all on the same deadline. Getting any element wrong creates penalties that compound. We manage the full contractor-side compliance cycle so your directors can focus on building.

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19th

Monthly CIS300 filing deadline

14 days

Deadline to issue each deduction statement

5 years

GPS reapplication ban on fraud-linked revocation (April 2026)

The specific challenges

What makes main contractors accounting different.

Subcontractor verification at volume

Every subcontractor must be verified with HMRC before the first payment. HMRC's response sets the deduction rate: 0% (GPS), 20% (registered) or 30% (unregistered). At volume, managing verifications across a rotating pool of subbies, tracking when re-verification is needed and keeping the records that demonstrate you did it is a significant administration burden. Since 6 April 2026, re-verification before each payment is also one of the three core due-diligence steps that protect your business against GPS revocation under Finance Act 2026 (FA 2004 ss.62A/62B).

CIS300 monthly cycle and nil returns

CIS300 returns are due by the 19th of the month following each tax month. From 6 April 2026, nil returns are mandatory in any month where no subcontractor payments are made (the nil-return obligation was removed in 2015 and reinstated this year). Late filing penalties start at £100 on day one and escalate to £300 or 5% of the CIS liability at 6 months, and £300 or 100% of the liability at 12 months. Stop-start project schedules mean many contractors have nil-return obligations they are not aware of.

The April 2026 'knew or should have known' standard

Finance Act 2026 (Royal Assent 18 March 2026) introduced immediate GPS revocation where a contractor knew or should have known of fraudulent connections in the supply chain. The 'should have known' standard is critical: HMRC does not have to prove intent. A failure to carry out pre-payment due diligence (CIS re-verification, Companies House legitimacy check, bank account name verification) is itself enough for revocation and a 5-year reapplication ban. For contractors earning £500,000 a year, losing GPS means roughly £100,000 a year in deductions instead of gross payments.

Knowledge-based penalty under FA 2004 ss.62A/62B

Where a contractor makes a payment knowing (or having reason to know) that a connected party has deliberately failed to comply with CIS obligations, FA 2004 s.62A (inserted by FA 2026) creates a penalty of 20% of the payment. The same 20%-of-sums liability applies to returns made in that knowledge under s.62A/62B. Where deliberate behaviour by a company produces penalties, HMRC can also pursue company officers personally under existing officer-liability rules. Documented pre-payment due diligence is the primary defence.

How we help

What we do for main contractors.

Monthly CIS300 return service

We prepare and file your CIS300 monthly return by the 19th, covering all subcontractor payments made in the preceding tax month. We handle nil returns in inactive months so the mandatory-from-April-2026 obligation is met without your involvement. Payment summaries to HMRC are co-ordinated with your payroll cycle.

Subcontractor verification and due-diligence records

We run HMRC verification for each subcontractor before their first payment, record the result and the deduction rate applied, and maintain the supporting Companies House and bank-name-verification evidence that protects you against the 'should have known' standard. We flag any subcontractor whose GPS or registered status changes between payments.

Deduction statement issuance

Every subcontractor who has a CIS deduction taken is legally entitled to a written deduction statement within 14 days of each payment. We produce and issue compliant statements on your behalf, maintaining the archive that satisfies both your legal obligation and HMRC's audit trail requirements.

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“We were filing the monthly returns ourselves but the April 2026 due-diligence rules made us realise we needed a proper system. Having the verification records, Companies House checks and bank confirmations all documented before every payment is something we could not have built quickly in-house.”

Director, regional main contractor, Yorkshire

Composite snapshot based on client patterns. Name and figures anonymised. The tax mechanics are real.

Questions from main contractors

We had no subcontractor payments this month. Do we still need to file a CIS300?

Yes, from 6 April 2026 nil returns are mandatory. If you make no subcontractor payments in a tax month, you must either file a CIS300 nil return by the 19th of the following month or pre-notify HMRC of inactivity. The penalty for a late nil return starts at £100 on day one and escalates from there. This obligation was removed in 2015 and reinstated this April, so many contractors are not yet aware of it.

What does the April 2026 'should have known' rule actually require us to do?

To meet the due-diligence standard introduced by Finance Act 2026, you need three things on file before each subcontractor payment: a current HMRC CIS verification result, a Companies House legitimacy check confirming the subcontractor entity is active and matches what you have been told, and a bank account name verification confirming the account name matches the registered entity. If you cannot show these steps were taken, HMRC can revoke GPS on the basis that you should have known of fraudulent supply-chain connections, even without proving you had actual knowledge.

How do deduction statements differ from the CIS300 return?

The CIS300 is a monthly return filed with HMRC listing all subcontractor payments and the deductions made. A deduction statement is a separate document issued directly to each subcontractor, setting out the gross payment, the amount liable to deduction, the cost of materials excluded and the net payment made. Both are required. The deduction statement must be issued within 14 days of the relevant payment; there is no grace period.

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Book a free call. We will talk through your CIS position, your deduction history and whether there is anything worth changing. No hard sell, no obligation.

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Specialist in CIS and construction accounting, not a generalist practice

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24-hour response guarantee

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Fixed fees, quoted before we start

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Other trades we work with

Plumbers Electricians Joiners and Carpenters Groundworkers Roofers

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