CIS accounting

CIS compliance for maintenance and facilities management companies.

Maintenance and facilities management companies face a CIS question that most contractors never have to answer: which of their activities fall inside the scheme and which do not? The answer determines who must be paid under CIS, who can be paid gross, and whether the company itself is a contractor with monthly return obligations. Getting the boundary wrong in either direction creates problems: failure to operate CIS where it applies carries a penalty; wrongly applying CIS to outside-scope payments adds unnecessary friction. A second, separate question is whether the FM company itself has become a deemed contractor by crossing the £3 million annual construction spend threshold.

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£3m

Annual construction spend that triggers deemed contractor status

19th

Monthly CIS300 filing deadline (following tax month)

£100

Starting penalty for a late or missing CIS300 return

The specific challenges

What makes maintenance and fm companies accounting different.

The repair and refurbishment vs routine maintenance boundary

HMRC's CIS 340 guidance draws the key line here. Repair work -- making good, replacement of defective or damaged parts of a building or structure -- is a construction operation within the scope of CIS. Refurbishment and alteration work is also inside CIS. Routine maintenance on premises that are not undergoing any construction operations is generally outside. In practice, FM companies carry out both: a reactive repairs and dilapidations contract is typically inside CIS; a planned preventative maintenance contract limited to servicing and cleaning of operational equipment is typically outside. Where a single contract covers both types of work, the CIS analysis must be done at task level, not contract level. Source: CIS 340, HMRC (updated December 2024), citing Finance Act 2004 s.74.

Deemed contractor status at £3 million

A business that is not in the construction trade but spends more than £3 million per year on construction operations becomes a deemed contractor and must register for CIS, operate the scheme on qualifying payments, and file monthly CIS300 returns. Large FM groups managing extensive refurbishment programmes, dilapidations works or fit-out projects for clients regularly cross this threshold without realising it. Once crossed, the obligation continues until the firm can demonstrate its rolling 12-month construction spend has fallen below £3 million.

Payroll and NIC across a mixed workforce

FM companies typically employ a large workforce of direct employees (site managers, cleaning staff, helpdesk) alongside CIS subcontractors and specialist trade subbies. Since April 2025, employer NIC is 15% on earnings above £5,000. Managing the correct NIC position for each worker category, maintaining payroll compliance under auto-enrolment and ensuring CIS subbies are not treated as employees (or vice versa) requires sustained attention.

CIS300 nil returns from April 2026

FM companies that have registered as deemed contractors must file a CIS300 nil return for any tax month in which they make no qualifying subcontractor payments. This obligation was reinstated from 6 April 2026 after being removed in 2015. For FM businesses with seasonal contract patterns, months with no CIS-qualifying work still require a return, and missing one starts the penalty clock at £100.

How we help

What we do for maintenance and fm companies.

CIS boundary review across your contract portfolio

We work through your maintenance and FM contract portfolio and classify each contract and task type by reference to the Finance Act 2004 s.74 definition and the CIS 340 guidance. We produce a clear map of which work streams require CIS treatment, which are outside scope, and how to handle mixed contracts at task level. This protects against both under-compliance (failing to operate CIS) and over-compliance (deducting where not required).

Deemed contractor assessment and registration

We calculate your rolling 12-month construction spend and identify whether you are at or approaching the £3 million deemed contractor threshold. Where registration is required, we handle it. Where you are already registered, we ensure the monthly return and payment obligations are being met correctly.

Monthly CIS300 returns and nil-return management

We prepare and file your CIS300 monthly returns by the 19th, handle nil returns in months with no qualifying payments, verify all subcontractors before the first payment, and issue payment and deduction statements within the 14-day window. From April 2026 nil returns are mandatory again: we manage this for every inactive month.

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“We had assumed our maintenance contracts were entirely outside CIS. The review identified that about a third of our reactive repair spend should have been going through the scheme. Getting that right avoided a significant penalty exposure.”

Operations director, facilities management group, South East England

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

Questions from maintenance and fm companies

We carry out both planned maintenance and reactive repairs on the same buildings. How do we know which payments need CIS?

The distinction follows HMRC's CIS 340 guidance (updated December 2024) and Finance Act 2004 s.74. Reactive repairs -- making good defects, replacing damaged structural or building fabric components -- are construction operations and CIS applies to the labour element of payments to subcontractors. Routine planned maintenance on operational equipment (servicing, cleaning, inspection of systems that are not being repaired or altered) is generally outside CIS where the premises are not undergoing any construction operations. Where a single contract bundles both types of work, the analysis must be done at task level. We carry out that classification and produce a written protocol so your payments team can apply it consistently.

We are not a construction company. Does the £3 million threshold apply to us?

Yes, if your annual spend on construction operations exceeds £3 million, you become a deemed contractor regardless of your primary business. The spend includes refurbishment, fit-out, dilapidations and repair work placed with outside contractors, but excludes routine maintenance that falls outside the CIS construction operations definition. We calculate the correct spend figure, taking care to exclude non-qualifying work, and advise whether registration is required.

We registered as a CIS contractor but some months we have no subcontractor payments. Do we still need to file?

Yes, from 6 April 2026, nil returns are mandatory for every tax month in which you make no qualifying subcontractor payments. This obligation was removed in 2015 and reinstated under the April 2026 changes. A late or missing nil return carries a penalty starting at £100. You can pre-notify HMRC of inactivity in advance as an alternative to filing a nil return each month.

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Talk to a specialist maintenance and fm companies accountant

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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