A contractor new to the construction industry starts to pay subcontractors in late December 2011.

But whenever you do start paying subcontractors again you must be sure to send HMRC a monthly return when it's due.

If you need to verify your subcontractors' payment status, see the pages in this guide on how to verify a subcontractor and paying subcontractors.

You can read more about issuing deduction statements in our guide below to paying subcontractors under CIS.

Under CIS, there are two ways of paying subcontractors - gross or under deduction.

As a CIS contractor you are obliged to complete some paperwork whenever you pay subcontractors.

It is not a declaration that you will only be paying subcontractors from whom no deduction is required to be made.

Second, it guarantees payment bonds that the contractor will pay suppliers and subcontractors.

The contractor has been paying subcontractors for sixteen months before sending in his outstanding returns for the period from 5 May 2009 to 5 August 2010.

A nil return is not a return stating that you have only paid gross subcontractors in the month.