If a contractor takes CIS deductions from your pay, they have to give you a statement every tax month. These statements are your evidence when you claim the deductions back, so it's worth knowing what each line means and how to spot one that doesn't add up.
When you should get one
GOV.UK says you should receive a statement of what you were paid and what was deducted within 14 days of the end of each tax month. A tax month runs from the 6th of one month to the 5th of the next. So for work paid between 6 June and 5 July, the statement shows "tax month ending 5 July" and should reach you by 19 July.
If it's late, GOV.UK says to ask your contractor. If you've lost one, ask for a replacement.
What's on it
HMRC's guide for contractors (CIS 340, paragraph 3.15) lists what the statement must show, and its summary in paragraph 3.19 and example statement (Appendix E) add the amount liable to deduction. In plain terms:
| Line | What it means |
|---|---|
| Contractor's name and employer tax reference | Who paid you, and their HMRC reference. |
| Tax month ending | The tax month the payment was made in, shown as its end date (the 5th). If the contractor gives one statement per payment, it can show the payment date instead. |
| Your name and UTR | The subcontractor: you. |
| Verification number | Only shown if the contractor couldn't verify you with HMRC and deducted at the higher rate. |
| Gross amount | What you were paid before any deduction. If you're VAT registered, VAT is left out of this figure. |
| Cost of materials | Materials (and some other costs) that reduce the amount the deduction is worked out on. |
| Amount liable to deduction | Gross minus materials: the part the percentage is taken from. |
| Amount deducted | The CIS deducted and passed to HMRC. |
Many statements also show the net amount paid, which is what landed in your bank.
How the figures should add up
CIS 340 (paragraph 3.12) explains how the contractor works out the deduction:
- Start with the gross amount, leaving out VAT if you're VAT registered.
- Take off what you actually paid for materials, consumable stores, fuel (except fuel for travelling), plant hire, and the cost of manufacturing or prefabricating materials.
- Apply the deduction rate to what's left.
GOV.UK gives the rates: 20% if you're registered for CIS and the contractor can verify you, 30% if not. If you have gross payment status, nothing is deducted.
Worked example
| Line | Figure |
|---|---|
| Gross amount | £2,500 |
| Cost of materials | £500 |
| Amount liable to deduction | £2,000 |
| Amount deducted (20%) | £400 |
| Net paid (no VAT) | £2,100 |
So: £2,500 − £500 = £2,000. 20% of £2,000 = £400. £2,500 − £400 = £2,100 paid.
Four signs a statement is wrong
- The deduction isn't 20% or 30% of the amount liable. Your materials figure may have been missed, or the wrong rate used.
- Deducted at 30% when you're registered. GOV.UK says the 30% rate applies if you're not registered, or if the contractor can't verify you. Ask the contractor to check how they verified you.
- Gross minus materials doesn't equal the amount liable.
- Two statements for the same tax month from one contractor. It could be a second payment, or a duplicate.
GOV.UK's advice is to raise it with your contractor if the figures look wrong.
If you can't get a statement
If the contractor won't or can't send one, GOV.UK says you can write to HMRC at PT Operations, HM Revenue and Customs, BX9 1BX, with:
- your name, address and UTR
- the contractor's name and address
- the contractor's tax reference, if you know it
- the payment dates or tax months
- why you don't have the statements
Keep them
HMRC may ask for evidence of your deductions when you claim them back, so GOV.UK says to keep a record. A folder per tax year, with one PDF or photo per contractor per month, is enough.
FAQ
Do I get a statement if I'm paid gross? The statement is about deductions. If none were taken, check with your contractor what they send.
Does the statement show my tax bill? No. It shows what was paid and deducted in one tax month. Your tax for the year is worked out through your Self Assessment return.
What goes on my tax return? GOV.UK tells sole traders to record total pay before deductions as income and total deductions as "CIS deductions". Our guide How to add up your CIS deductions for your tax return covers that step.
Checking a year of statements
cissplit reads CIS statements (PDFs or photos) and checks the deduction rate on every one. It flags 30% deductions, an amount liable that's more than gross minus materials, two statements for the same month and gaps between a contractor's months. Then it totals the year, with every statement listed by contractor. Your first 3 statements are free, with no sign-up. You still check the figures against your statements.
This isn't tax advice. Check GOV.UK's CIS guidance or an accountant for your situation, and check the figures before you submit anything.