Written by Peter Allen MAAT, co-founder and Finance Director of Buzz Accounting, with more than 20 years in accountancy.
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Yes, if you are a mainstream contractor — this came back on 6 April 2026. Where you paid no subcontractors you must either file a nil return or notify HMRC of a period of inactivity, by the 19th. The nil filing obligation had been removed in 2015; HMRC's stated reason for reinstating it is that removing it did not reduce burdens and produced erroneous late-filing penalties. Deemed contractors are not legally required to file a nil return, but if they neither file nil nor notify inactivity HMRC will issue a penalty — cancelled if they then confirm no subcontractors were paid.
Nil returns were reinstated for mainstream contractors. If you paid no subcontractors in a tax month you must either file a nil return or notify HMRC of inactivity by the 19th. Doing neither is a missed return.
CIS late-filing penalties are charged per return, not per amount of tax. A nil month has no tax attached to it at all, so a run of unfiled nil months produces a bill with nothing underneath it. A return more than twelve months late can attract £3,000, or 100% of the deductions on it, whichever is higher — and on a nil return the deductions figure is zero, so it is the fixed amount that applies.
They are not the same thing. A nil return says "this month, nothing". An inactivity notification tells HMRC you expect not to pay subcontractors for a period, which suppresses the monthly filing requirement for up to six months. The notification runs out. If you are still inactive after it expires and have not renewed it, the returns become due again and nothing will tell you.
For a business whose subcontractor use is seasonal, filing a nil return every month avoids relying on an inactivity period that has to be renewed.
This question is part of CIS returns and verification, which covers the whole area.
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