CIS GUIDE

How to pay CIS deductions to HMRC online.

If you are a contractor in the Construction Industry Scheme, the money you hold back from subcontractors is not yours to keep. It has to reach HMRC every month. This guide explains when it is due, the ways you can pay, and how to get the payment reference right.

Figures for the 2026/27 tax year · Last reviewed 21/10/2026

What you are paying and why

As a CIS contractor, you take a deduction from each payment you make to a subcontractor. The rate depends on the subcontractor's status:

20% for registered subcontractors
30% for unregistered subcontractors
0% for subcontractors with gross payment status

The deduction is not worked out on the whole invoice. You start with the gross invoice total, then take off VAT and certain costs the subcontractor paid for, such as materials they bought directly, plant hire, consumable stores and fuel (other than for travel). The rate applies to what is left. If you want the full picture of how the scheme works, our guide on how CIS tax works covers it.

The amounts you deduct are held on behalf of HMRC. Paying them over on time is one of your core duties as a contractor, alongside verifying subcontractors and filing a monthly return.

CIS is paid with your PAYE, not separately

This is the part that catches people out. There is no separate CIS bill. HMRC's guidance is that you pay CIS deductions in the same way as PAYE and National Insurance.

When you register as a contractor, HMRC sets up a CIS scheme for you. If you already run payroll for employees, HMRC turns your existing PAYE scheme into a combined PAYE and CIS scheme. Either way, you make one payment each month to cover:

Income Tax deducted from employees through payroll, if you have any
National Insurance for employees, if you have any
CIS deductions taken from subcontractors

So if you have both employees and subcontractors, you add the two together and pay a single amount using your employer reference.

When the payment is due

HMRC works in tax months, which run from the 6th of one month to the 5th of the next. The deadlines are:

Paying electronically. The payment must reach HMRC by the 22nd of the month after the tax month ends.
Paying by cheque through the post. It must reach HMRC by the 19th.
Paying quarterly. If you pay quarterly, the payment is due by the 22nd after the end of the quarter. For example, 22 July for the quarter from 6 April to 5 July.

For example, deductions you made between 6 October and 5 November 2026 must reach HMRC by 22 November 2026 if you pay online.

The monthly CIS return has its own, earlier deadline. It must reach HMRC by the 19th of the month after the tax month ends. Payment and deduction statements to subcontractors are due within 2 weeks of the end of each tax month. HMRC's example puts that on the 19th too.

Ways to pay CIS deductions online

HMRC accepts several payment methods. They differ mainly in how quickly the money arrives.

Direct Debit

You can set up a Direct Debit through your HMRC online account. You only do it once. HMRC then collects the amount based on what you have reported, so it changes each month with your figures. HMRC says to set it up at least 4 working days before the payment due date, and it will tell you the date and amount no later than 3 working days before it collects.

There is a limit worth knowing. GOV.UK lists a CIS contractor who is not enrolled for PAYE Online among those who need to pay another way.

Approve a payment through your online banking

You can pay by approving a payment through your online or mobile banking. You can pick a payment date before the due date. HMRC says the payment is usually instant, but it can take up to 2 hours to show in your bank account.

Bank transfer

You can pay by Faster Payments, CHAPS or Bacs. The UK bank details HMRC publishes for PAYE are:

Sort code: 08 32 10
Account number: 12001039
Account name: HMRC Cumbernauld

Faster Payments usually reach HMRC the same or next day, including weekends and bank holidays. CHAPS usually arrives the same working day if you pay within your bank's processing times. Bacs usually takes 3 working days, so leave room if you use it. HMRC also publishes separate details for paying from an overseas account. Always check the current details on GOV.UK before you add HMRC as a new payee.

Debit or corporate credit card

You can pay online by debit card or corporate credit card. HMRC accepts the payment on the date you make it, not the date it reaches HMRC's account, including weekends and bank holidays. There is no fee for a personal debit card. A non-refundable fee applies to corporate credit and corporate debit cards. You cannot pay with a personal credit card.

Cheque by post

Cheques are still accepted for employers with fewer than 250 employees. Make it payable to "HM Revenue and Customs only" and write your 13-character Accounts Office reference on the back. It must reach HMRC by the 19th.

Getting the payment reference right

The reference matters more than most people expect. HMRC warns that if you use the wrong one, the payment may be delayed or used to pay a different tax bill that you owe.

Your reference is your 13-character Accounts Office reference number. You will find it in your HMRC online account, if you have enrolled for PAYE Online, and on the letter HMRC sent when you registered as an employer. Type it without spaces.

Paying early or late

If you pay before or after the usual window, you add 4 extra digits to the end of the reference, so HMRC knows which period the money is for:

The first 2 digits are the last 2 numbers of the tax year the payment is for. The 2026/27 tax year ends in 2027, so that is 27.
The next 2 digits are the number of the tax month. Month 01 runs from 6 April to 5 May, month 02 from 6 May to 5 June, and so on to month 12, which runs from 6 March to 5 April.
If you pay quarterly, use the number of the month the quarter ends on: 03, 06, 09 or 12.

So a late payment for the tax month 6 October to 5 November 2026, which is month 07, would end in 2707. If you pay through HMRC's online service, it works the extra digits out for you.

A worked example

This example is made up to show the steps. Imagine a small building contractor with no employees. In the tax month from 6 October to 5 November 2026, it pays one registered subcontractor against an invoice for £2,500, which is £2,000 of labour and £500 of materials the subcontractor bought. There is no VAT on the invoice.

The contractor takes off the £500 of materials, leaving £2,000. The deduction at 20% is £400, so it pays the subcontractor £2,100. It files the CIS return and sends the subcontractor a payment and deduction statement by 19 November 2026. It then pays HMRC £400 by 22 November 2026, using its 13-character Accounts Office reference.

If the same contractor also had employees with £1,100 of tax and National Insurance due for that month, it would pay £1,500 in one payment, not two.

If there is nothing to pay

A quiet month still has paperwork. If you made no payments to subcontractors, you file a nil CIS return showing payments of 0. You can also make an inactivity request to tell HMRC you have temporarily stopped using subcontractors.

HMRC also says CIS contractors with no payments to make need to send an Employer Payment Summary, by the 19th of the month following the tax month. If you do not tell HMRC, it may estimate what you owe and you may get a penalty.

What happens if you pay late or file late

HMRC says you may have to pay interest and penalties if your payment is late. The monthly return has its own fixed penalties if it arrives after the 19th:

1 day late: £100
2 months late: £200
6 months late: £300 or 5% of the CIS deductions on the return, whichever is higher
12 months late: £300 or 5% of the CIS deductions on the return, whichever is higher

For returns later than 12 months, there may be an extra penalty of up to £3,000 or 100% of the CIS deductions on the return, whichever is higher. These apply to each monthly return, so a few missed months add up quickly.

Check the payment has arrived

After you pay, log in to your HMRC online account for PAYE and look for the payment. HMRC says the account should update within 6 working days. If it does not show, or looks to be against the wrong month, check the reference you used before you contact HMRC.

Records to keep alongside your payments

For each subcontractor payment, keep:

The gross amount invoiced, excluding VAT
Any deduction you made
Where you made a deduction, the cost of materials the subcontractor invoiced you for, excluding VAT

Keep copies of the CIS payment and deduction statements you give your subcontractors.

Keep these for at least 3 years after the end of the tax year they relate to. You can be fined up to £3,000 if you cannot show your CIS records when HMRC asks for them. If you are a subcontractor rather than a contractor, our guide on how to claim a CIS refund looks at the other side.

A simple monthly routine

By the 5th: the tax month ends. Make sure every subcontractor invoice is in your books with labour, materials and VAT split out.
By the 19th: file the CIS return, or a nil return, and send payment and deduction statements.
By the 22nd: make one payment to HMRC covering CIS and any PAYE, with the correct reference.
About a week later: check your HMRC online account shows the payment against the right month.

The work that makes this easy is the bookkeeping behind it. When subcontractor invoices and payments are posted as they happen, the monthly figures are already there when the 19th comes round.