CIS Nil Returns: What Builders Must File Every Month From April 2026 (And What Happens If You Don't)
From 6 April 2026, every CIS contractor must file a monthly return — even when no subcontractors were paid that month. The nil return is back, and so are the automatic penalties starting at £100 for a single day late. Here's what builders need to know and do now.
The nil return is back — and so are the penalties
If you're a CIS contractor, here's something you may have missed: from 6 April 2026, you must file a CIS return every single month, even if you didn't pay a single subcontractor.
For years, the nil return requirement was quietly suspended. Contractors who didn't pay subcontractors in a given month simply did nothing. That grace period is over. HMRC has reinstated the full nil return obligation, and with it, the automatic late filing penalty regime is fully active again.
We're now six months in, and HMRC is issuing penalties — including to contractors who didn't realise anything had changed.
What exactly changed?
From 6 April 2026, all mainstream CIS contractors face a simple rule:
- ◢You paid subcontractors this month? File your CIS300 return as normal by the 19th of the following month.
- ◢You didn't pay any subcontractors this month? File a nil return — confirming to HMRC that nothing was paid.
- ◢You know in advance you won't be paying subcontractors for a while? You can notify HMRC in advance instead of filing nil returns each month.
That's it. No subcontractors, no payments, no deductions — you still file. The return simply tells HMRC "nothing happened this month."
Why did HMRC bring this back?
The nil return requirement was originally part of the CIS rules but was effectively relaxed in practice. HMRC reinstated it to tighten compliance, close gaps in their records, and make it easier to identify contractors who have gone quiet or stopped operating altogether.
What happens if you miss a month
This is where it gets expensive. The penalty regime under FA09/Schedule 55 is automatic and escalates fast:
| How late? | Penalty | |---|---| | 1 day late (return not filed by 19th of the month) | £100 fixed penalty | | 2 months late | Additional £200 fixed penalty | | 6 months late | £300 or 5% of CIS deductions, whichever is greater | | 12 months late | A further £300 or 5% of CIS deductions, whichever is greater |
These penalties are per return, per month. So if you've missed six months of nil returns since April 2026, you could already be facing £600 in fixed penalties — and that's before the tax-geared penalties kick in at the six-month mark.
A worked example
You're a small contractor. Work dried up in May 2026 and you didn't pay any subcontractors from May through September. You didn't file nil returns because you didn't think you needed to.
- ◢May return (due 19 June): 1 day late = £100. Now 4+ months late = still accruing.
- ◢June return (due 19 July): same — £100.
- ◢July return (due 19 August): £100.
- ◢August return (due 19 September): £100.
- ◢September return (due 19 October): £100.
That's £500 in fixed penalties before any tax-geared charges. And the May return is approaching the six-month threshold, which would trigger a further £300 minimum.
All for returns that say "nothing to report."
How to file a nil return
Filing a nil return is straightforward:
- ◢Log into HMRC's CIS Online service (via your Government Gateway account).
- ◢Select your contractor scheme and the relevant tax month.
- ◢Enter zero subcontractors — confirm no payments were made.
- ◢Submit — you'll get a confirmation reference.
The whole process takes under five minutes. The deadline is the 19th of each month for the previous tax month (which runs from the 6th of one month to the 5th of the next).
Using CIS software?
Most commercial payroll and CIS software (including Sage, Xero, QuickBooks and dedicated CIS tools like Evolution or MoneySoft) can file nil returns automatically. Check with your software provider if you're not sure — some can be set to file nil returns by default whenever no subcontractor payments are recorded.
What if you've already missed months?
If you've missed nil returns since April 2026, here's what to do:
- ◢File the missing returns now. Go back through each missed month and submit a nil return for each one. This stops the penalty clock for further fixed penalties.
- ◢Check for penalty notices. HMRC should have sent these automatically, but they can arrive late or get lost. Check your HMRC online account and your post.
- ◢Consider appealing. You can appeal a penalty if you have a "reasonable excuse" — for example, you genuinely didn't know about the rule change, you were ill, or you had a bereavement. HMRC's definition of reasonable excuse is narrow but not impossible. A successful appeal can reduce penalties, though interest on late payments will still apply.
- ◢Talk to your accountant. If the penalties are stacking up, a construction accountant can often negotiate with HMRC on your behalf, particularly if you're making the effort to catch up voluntarily.
The "reasonable excuse" angle
HMRC has confirmed that not knowing about a rule change is not automatically a reasonable excuse. However, if you can show you took reasonable steps to stay informed — for instance, you rely on an agent who failed to advise you — you may have a stronger case. Each appeal is judged individually.
The bigger picture: CIS compliance is getting tighter
The nil return reinstatement is part of a broader HMRC push on CIS compliance in 2026. Other changes and pressures include:
- ◢Making Tax Digital for Income Tax (MTD for ITSA) — from April 2026, sole traders and landlords with income over £50,000 must keep digital records and submit quarterly updates. Many CIS subcontractors fall into this bracket. The threshold drops to £30,000 from April 2027, which will pull in a much larger group of builders and trades.
- ◢Stricter verification of subcontractors — HMRC is taking longer to process subcontractor verifications and is scrutinising gross payment status renewals more closely.
- ◢Increased employer compliance reviews — HMRC officers are running more targeted compliance checks on construction businesses, particularly around employment status and off-payroll working (IR35).
What you should do right now
- ◢Check if you've filed every CIS return since April 2026. If any months are missing — even months with no subcontractor payments — file a nil return immediately.
- ◢Set a monthly reminder for the 14th of each month so you never miss the 19th deadline again.
- ◢If you have an accountant or bookkeeper, ask them whether they're filing your nil returns automatically. Many assumed the old relaxation was still in place.
- ◢Review your penalty position with a professional if you've missed multiple months. The sooner you catch up, the lower the total penalty exposure.
Need help catching up?
If you've missed nil returns since April 2026 — or if you're unsure whether your CIS filings are up to date — we can help. London Construction Accountants offers a free CIS compliance review where we'll check your filing history, identify any gaps, and tell you exactly what needs to be filed and what penalties you might be facing. No obligation, no jargon.
Book your free CIS review — we'll have you back on track within days.
This article is for general guidance only and does not constitute formal tax advice. Rates, thresholds and deadlines change — always confirm the current position with a qualified accountant.