Self Assessment by 31 January 2027: what a CIS subcontractor pays, and when payments on account apply

By 31 January 2027 a sole trader must file the online Self Assessment return for the 2025 to 2026 tax year and pay what is owed for it, and many must also pay a first instalment towards the next year on the same day. For a subcontractor paid under the Construction Industry Scheme (CIS) the bill is usually much smaller than it first looks, because the 20% that contractors held back counts as tax already paid.

The dates

GOV.UK gives the January deadline as 11:59pm on 31 January 2027. You have been able to file since 6 April 2026.

What payments on account are

Payments on account are two advance payments towards next year's bill. GOV.UK says each one is half of the tax you owed last year, including Class 4 National Insurance, and you must make them unless either:

• the amount you owed last year was less than £1,000; or
• you paid more than 80% of last year's tax outside Self Assessment.

The second test is where CIS comes in. Section 62 of the Finance Act 2004 treats a CIS deduction as Income Tax paid on your profits, and section 59A of the Taxes Management Act 1970 counts tax deducted or treated as paid when it works out what is left.

One profit, two bills

Take two sole-trader bricklayers in England or Wales. Each made a profit of £42,000 in 2025 to 2026.

Dan is registered for CIS. Contractors paid him £36,000 for labour and deducted 20%, which is £7,200. He also did £12,000 of private jobs for householders with nothing deducted. His costs were £6,000.

Mark did £48,000 of private work, with the same £6,000 of costs and no CIS.

The tax is the same for both. The Personal Allowance for 2025 to 2026 was £12,570, the basic rate was 20%, and Class 4 National Insurance was 6% on profits between £12,570 and £50,270.

What each of them pays is very different.

Dan owes no payments on account on either test. The £451.80 left to pay is under £1,000, and the £7,200 deducted is 94% of his £7,651.80 bill.

Mark's figures assume he made no payments on account last year, as in GOV.UK's own example for a first return. If he did make them, they come off the £7,651.80.

If all of Dan's £48,000 had been CIS labour, the deductions would have been £9,600 and HMRC would owe him £1,948.20. GOV.UK says that if you are due a refund, "HMRC will pay the money back".

What to do before January

1. Find every monthly payment and deduction statement from each contractor for 6 April 2025 to 5 April 2026. Ask now for any that are missing.
2. Add up two totals: your pay before deductions, and the deductions. For Dan they are £36,000 and £7,200. The £28,800 that reached his bank from contractors goes nowhere on the return.
3. On the return, record the pay before deductions as income and the total deductions as CIS deductions. GOV.UK says HMRC will then take the deductions off what you owe.
4. Look at your Self Assessment statement for payments on account. If you know this year's profit will be lower, you can ask HMRC to reduce them online or on form SA303. If you reduce them too far, you are charged interest on the difference.
5. File before the last week. A refund cannot start until the return is in.

Our CIS deduction calculator checks what a single statement should show.

If you miss it

GOV.UK lists the penalties:

• an initial £100 for a late return;
• after 3 months, £10 a day up to £900;
• after 6 months, 5% of the tax due or £300 if that is more, and the same again after 12 months;
• for late payment, 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest.

HMRC's late payment interest rate has been 7.75% since 9 January 2026. On Mark's £7,651.80 that is about £1.62 a day, and the first 5% penalty would be £382.59.

If you cannot pay in full, GOV.UK says you may be able to set up a payment plan to pay in monthly instalments.

Two things that catch trades

Making Tax Digital does not change this return. The quarterly updates that started on 6 April 2026 belong to the 2026 to 2027 year. The return due on 31 January 2027 is for the year before. But Dan's £48,000 of turnover in 2025 to 2026 is over £30,000, so he joins from 6 April 2027. Our guide to Making Tax Digital for sole-trader trades explains the test.

Scrap money and cash jobs go in the income figure. See tax on scrap copper.

Scottish taxpayers pay different Income Tax rates, so the sums above do not apply to them. This is general information, not tax advice. Ask an accountant about your own return.