A company in your construction group might make no subcontractor payments while it waits for the next project. Your finance team still needs to check whether it must submit a Construction Industry Scheme (CIS) return for that month.
A nil return tells HMRC that the contractor made no subcontractor payments to report.
Check every CIS scheme in your group. A scheme is the HMRC record under which a company or division reports its subcontractor payments. Keep each scheme’s reference on your monthly checklist, including those that haven’t reported payments for several months.
Who Must Submit a CIS Nil Return?
The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2026 restore the nil return requirement for mainstream contractors that have previously made payments under the scheme. Mainstream contractors are businesses whose activities include construction work. The requirement applies to months when they make no payments to report, unless an exemption applies.
Check whether each company is a mainstream contractor
HMRC’s guide for contractors and subcontractors, CIS 340, distinguishes mainstream contractors from deemed contractors. Deemed contractors include businesses outside the construction industry that must operate CIS because of their construction spending. They aren’t legally required to file nil returns. HMRC can still issue a penalty for an unreported month, then cancel it when the contractor confirms that no payments were made.
Check the status of each special purpose vehicle (SPV), subsidiary, and joint venture separately. Record whether it is a mainstream or deemed contractor, its CIS reference, and whether it has previously made subcontractor payments. Being part of a construction group doesn’t, by itself, decide the company’s CIS status.
Check procedures written before April 2026
HMRC’s policy paper on simplifying CIS administration explains that the government removed the nil return requirement in 2015. Contractors could still report inactivity or file voluntarily to avoid unnecessary penalties. HMRC restored the requirement in 2026 after finding that the earlier change hadn’t reduced administration.
Check whether your procedure still starts only when a subcontractor receives a payment. That can cause the team to miss a company that needs to file a nil return. Add a monthly check for schemes with no payments.
CIS Nil Return Deadlines and Inactivity Requests
You can submit a nil return, give advance notice under the 2026 rules, or ask HMRC to record temporary inactivity. The deadlines and conditions differ. Record which option each scheme uses and which months it applies to.
Submit the nil return by the 19th
HMRC’s monthly-return guidance sets the deadline at the 19th of the month in which the tax month ends. A CIS tax month runs from the 6th to the 5th. For example, a return for 6 September to 5 October must reach HMRC by 19 October.
Use HMRC’s CIS online service or commercial software that supports nil returns. Check this function before the deadline if your team normally submits returns showing payments.
Give advance notice at least 14 days before the tax month starts
The 2026 regulations allow a contractor to avoid the nil return by telling HMRC that it will make no payments under construction contracts in a specified tax month. It must give that notice at least 14 days before the month starts.
Set a reminder at least 14 days before the tax month starts. If you wait until that month has ended, this advance-notice deadline has passed. Submit the nil return unless another exemption applies to that month.
Ask HMRC to record temporary inactivity
HMRC’s guidance on temporarily inactive contractors describes a separate option for schemes that won’t make subcontractor payments for several months. HMRC can record inactivity for six months. Nil returns aren’t required for the months included in that period. If the request is made on a CIS300 return, inactivity starts with the next return period. You can ask for a further six months if needed.
CIS 340 also describes notifying HMRC of inactivity by the 19th. This is separate from the 14-day advance notice above. Check which months HMRC has recorded as inactive before deciding that a return isn’t needed.
Save the confirmation and set a reminder before the period ends. Renew the request or resume filing. If subcontractor payments restart, report them: CIS 340 explains that submitting a return showing payments ends the recorded inactivity.
Can Missed CIS Nil Returns Affect Gross Payment Status?
Gross Payment Status (GPS) allows a business to receive construction payments without CIS deductions. CIS 340 says HMRC may cancel a contractor’s own GPS if it doesn’t operate CIS correctly and also works as a subcontractor. A missed return in one subsidiary doesn’t automatically remove GPS from every company in the group.
Four consecutive late returns can lead to a review
HMRC’s CISR43150 guidance describes an automated compliance check for contractors that also hold GPS. Four consecutive late monthly returns can trigger the check. HMRC reviews failures within the previous twelve months and allows time for penalty appeals.
The check runs on the 7th of each month. HMRC must confirm a failed test and consider whether the business had a reasonable excuse before notifying it of withdrawal. The change takes effect 90 days after that notice. One missed nil return doesn’t cause immediate automatic cancellation.
Recorded inactivity changes the filing history
The same HMRC manual says recorded inactivity breaks the sequence of consecutive late returns. Keep the confirmation so you can show why no return was due for that month.
HMRC’s compliance-tolerance guidance allows it to ignore three CIS300 returns that arrive up to 28 days late when checking GPS eligibility. More late returns, or returns submitted after those 28 days, exceed that allowance. HMRC also considers whether there was a reasonable excuse. These rules don’t extend the filing deadline or remove late-filing penalties.
Keep the HMRC acknowledgement for each return, even when it reports no subcontractor payments.
How Sage Intacct Can Help You Track CIS Filing
Sage’s UK Close Automation documentation describes checklists that name the people responsible, set deadlines, and show task progress across companies. If you use this feature in Sage Intacct, you can create tasks that tell your team which returns to check and submit, and which acknowledgements to save.
Give each scheme its own task
Set up a task for every CIS scheme that your team needs to review. A company with several schemes needs separate checks for each one. Add reminders for inactivity periods that are about to end, and confirm that your team has access to Close Automation.
Name the person who prepares the return and the person who checks it. Set an internal deadline before the HMRC deadline. That gives the team time to find missing information or arrange a submission if the usual person is absent.
Save the filing acknowledgement
A task marked complete doesn’t prove that HMRC received the return. Save the acknowledgement showing the scheme reference and tax month. For inactivity, keep HMRC’s confirmation of the months that don’t need returns. Make these documents accessible to the person who reviews filing.
Our article on Sage Intacct’s audit trail covers wider financial records. For CIS, you also need the HMRC confirmations. Check which service or CIS software your team will use to submit returns. Close Automation helps you track the task; you must still arrange the submission.
Who Is Responsible for CIS Returns in a Contractor Group?
Your group can organise CIS filing through head office. Each company’s return still needs its own name and references. That means your monthly checklist must include all the schemes head office manages.
Head office must submit separate returns
The government’s 2023 CIS reform response considered a single group return but declined to introduce it. HMRC’s scheme-representative guidance allows one group company to act as the scheme representative for others. The representative submits returns and makes payments under each company’s name and references.
Each company remains legally responsible for meeting its CIS duties. Check that the representative has the required authorisation. Name the person responsible for each submission, including who will take over if they are absent.
Check divisions as well as companies
HMRC’s multiple contractor status guidance allows divisions of one business to have separate CIS records. They remain part of that business and share its Unique Taxpayer Reference (UTR).
A list of companies can therefore miss a scheme belonging to a division. Keep a list of all schemes, with the company or division name, UTR, and CIS reference. Use it to check that every scheme has a filing task or a confirmed exemption for the month.
How to Check CIS Returns Across Your Group
Before the next deadline, compare your list of schemes with the returns submitted and the inactivity confirmations. Include schemes that haven’t made payments recently and those managed by another group company.
Check each scheme and month
Work through the following checks:
- Identify the contractor. Record the company or division, UTR, CIS reference, contractor type, and previous subcontractor payments.
- Check whether a return is needed. Record the return submitted or the notice or inactivity confirmation that removes the need to file for that month.
- Check inactivity dates. Confirm when the recorded period ends, whether payments have restarted, and whether someone needs to request an extension.
- Name the people responsible. Record who prepares, checks, and submits the return, plus who provides cover during absence.
- Check the documents. Match each acknowledgement or inactivity confirmation to the scheme reference and tax month. Follow up tasks marked complete without those records.
- Find outstanding returns. Compare the deadlines with submission dates and penalty notices. If the business holds GPS, check whether its late returns could affect that status.
Submit missing returns and review penalty notices
HMRC’s April 2026 Employer Bulletin confirms a £100 penalty after a missed deadline, a further £200 after two months, and additional penalties at six and twelve months. A nil return can still attract fixed or minimum penalties even though it shows no deductions.
HMRC’s monthly-return guidance allows a penalty appeal within 30 days of the notice. Submit any required outstanding returns, check the notices, and decide whether you have grounds to appeal. Don’t assume that reporting no payments automatically cancels a mainstream contractor’s penalty.
Include Nil Returns in Your Monthly Filing Review
Check every scheme each month, including those with no subcontractor payments. Keep the return or exemption record, the deadline, and the names of the people responsible together. Your reviewer should be able to confirm what happened without searching old emails or asking someone to recall it.
Our guide to Sage Intacct for construction covers the wider finance requirements. If your team struggles to track filing tasks across companies, booking a discovery session is a good place to discuss how to organise that work in Sage Intacct.
References
- legislation.gov.uk, The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2026, SI 2026/289.
- HMRC, Construction Industry Scheme: a guide for contractors and subcontractors, CIS 340.
- HMRC, Simplification and administrative improvements to the Construction Industry Scheme.
- HMRC, File your monthly CIS returns.
- HMRC, CISR67010: temporarily inactive contractors.
- HMRC, CISR43150: system ad-hoc Tax Treatment Qualification Test.
- HMRC, CISR46080: compliance tolerance.
- Sage, Sage Intacct Close Automation.
- HMRC, Construction Industry Scheme reform: summary of responses.
- HMRC, CISR12230: scheme representatives.
- HMRC, Construction Industry Scheme: multiple contractor status.
- HMRC, April 2026 Employer Bulletin.
