The payment date determines the CIS reporting month, not the invoice date. Contractors report payments made to subcontractors during the relevant tax month, which runs from the 6th of one calendar month to the 5th of the next. An invoice dated March but paid in April therefore belongs to the period containing the April payment date.
That distinction matters when invoices remain unpaid, payments are split, or money changes hands close to the monthly cutoff. Your purchase ledger shows what you owe; your CIS return must reflect the payments you have actually made.
How to Identify the Correct CIS Month
Start with the payment date and place it within the appropriate 6th-to-5th period. Avoid using calendar months or descriptions such as “September invoices”, which can hide payments belonging to different returns.
These examples show how the cutoff works:
| Invoice date | Payment date | CIS reporting period | Return deadline |
| 25 August 2026 | 4 September 2026 | 6 August–5 September | 19 September 2026 |
| 25 August 2026 | 7 September 2026 | 6 September–5 October | 19 October 2026 |
| 30 September 2026 | 5 October 2026 | 6 September–5 October | 19 October 2026 |
| 30 September 2026 | 6 October 2026 | 6 October–5 November | 19 November 2026 |
A payment made on the 5th falls in the period ending that day. A payment made on the 6th belongs to the next period. The return is due by the 19th following the period’s end.
Why an Invoice Does Not Trigger CIS Reporting
Receiving an invoice, approving it or entering it into your accounting software does not, by itself, mean a CIS payment has occurred. The same applies to completing the work or reaching the invoice’s payment deadline.
For example, a subcontractor invoices on 28 August with payment due on 11 September. If you pay on 22 September, the payment belongs to the period ending 5 October.
An unpaid invoice stays outside the payment figures on your CIS return until payment occurs. Where part of an amount is genuinely withheld, that unpaid portion is not reported as though it has been paid.
Keep both dates in your records. The invoice date supports your bookkeeping, while the payment date establishes the CIS reporting period.
How to Report an Invoice Paid in Instalments
When an invoice is settled across different tax months, allocate each payment to its own period.
Suppose a subcontractor submits a £5,000 labour-only invoice. There is no VAT, and the applicable CIS deduction rate is 20%. You settle £2,000 of the invoice on 4 September and the remaining £3,000 on 18 September.
| Payment date | Amount settled before CIS | CIS deduction | Net payment | Period ending |
| 4 September | £2,000 | £400 | £1,600 | 5 September |
| 18 September | £3,000 | £600 | £2,400 | 5 October |
Do not report the full £5,000 with the first instalment or postpone everything until the final payment. CIS includes payments on account and stage payments.
Also distinguish the amount settled before CIS from the money transferred. In the first row, £1,600 reaches the subcontractor, but the payment before deduction is £2,000. For invoices containing materials or VAT, establish the correct breakdown for each payment before calculating the deduction.
Deposits and Retentions Follow the Payment
An advance payment towards construction work covered by CIS can trigger reporting before the final invoice arrives. Calling it a “deposit” does not automatically put it outside the scheme. Check what the payment represents and apply the appropriate treatment when it is made.
Retentions work in the opposite direction: part of the contract price remains unpaid until it is released.
For example, if you settle £9,500 before CIS deductions and retain £500, the retained £500 is dealt with when subsequently paid. Its reporting month follows that later payment.
The subcontractor’s payment status at the retention payment date also matters. Do not assume the deduction treatment used for the original work still applies months later.
Check Payments Close to the 5th Carefully
A planned payment date is not enough evidence that payment occurred. Preparing a payment run or sending a remittance advice should not automatically mark an invoice as paid.
For transactions around the cutoff, compare the payment instruction, bank transaction details and any confirmation of successful processing. Investigate rejected, cancelled or delayed transactions before filing.
If processing spans the 5th and 6th, establish the effective payment date for the method used. Seek advice where necessary rather than choosing whichever month is more convenient. Keep the supporting evidence with your CIS records so the allocation can be explained later.
Keep Filing, Statements and HMRC Payments Separate
Three related tasks can have different deadlines:
- Monthly return: submit by the 19th following the tax month.
- Payment and deduction statement: where deductions were made, provide it within 14 days after the tax month ends.
- Payment to HMRC: for contractors paying monthly, deductions are normally due by the 22nd electronically or the 19th by post. Allow for the payment method and non-working days.
Paying HMRC later does not move the subcontractor payment into a different CIS month. Likewise, an arrangement to pay HMRC quarterly does not make CIS returns quarterly.
Build a Payment-Based Monthly Check
Before filing, prepare a payment schedule covering the 6th to the 5th. For each subcontractor, record the invoice reference, payment date, amount before CIS excluding VAT, relevant materials amount, deduction and net payment.
Match that schedule to bank records and investigate differences. In particular, check that:
- Unpaid invoices have not been included.
- Instalments have not been counted twice.
- Retentions remain separate until released.
- Payments made without deductions have not been overlooked.
Keep CIS records for at least three years after the end of the tax year they relate to.
If your records currently group everything by invoice month, Interface Accountants’ bookkeeping services can support more organised records alongside your monthly CIS preparation.
Five Frequently Asked Questions
1. What if the subcontractor sends the invoice after I have paid?
The later invoice does not move the payment into another month. Record the payment when made and obtain the supporting breakdown needed to calculate and report it correctly.
2. Do payments to subcontractors with gross payment status count?
Yes. Payments within CIS must still be included on the monthly return even where the subcontractor is entitled to receive payment without deductions.
3. What if I receive invoices but pay nobody during the month?
Unpaid invoices do not create reportable payments. File a nil return or make an appropriate inactivity request; do not simply ignore the monthly reporting requirement.
4. How do I fix a payment reported in the wrong month?
Correct the affected returns through the appropriate amendment process. Check both periods so the payment is neither duplicated nor omitted, and review any related deduction statements.
5. What if I accidentally underpay and send the balance next month?
Report the additional payment in the month it is actually made. A genuine later balancing payment does not normally require moving it back to the original invoice month.
Make the Payment Record Your Starting Point
Accurate CIS reporting starts with evidence of payment, supported by the invoice and deduction calculation. Applying that approach consistently makes instalments, delayed settlements and retentions easier to handle as your workload grows.
Interface Accountants’ CIS return service includes preparation, review and submission following your approval. Keeping payment records ready throughout the month gives that review a stronger foundation and reduces avoidable corrections after filing.