A contractor that makes a CIS deduction must give the subcontractor a written payment and deduction statement within 14 days of the end of the tax month, so by the 19th. The statement is the subcontractor’s receipt for tax paid on its behalf: sole traders and partners use it to complete their Self Assessment return, and companies use it to set deductions against their PAYE bill. HMRC gives credit only where the statement agrees with what the contractor reported on its monthly return.

Where does the obligation come from?

Regulation 4(8) of the Income Tax (Construction Industry Scheme) Regulations 2005 requires the contractor to give the information in writing to the subcontractor not later than 14 days after the end of the tax month. HMRC’s Construction Industry Scheme Reform Manual (CISR12160) explains that statements replaced the old CIS vouchers from 6 April 2007. A tax month runs from the 6th to the 5th, so the statement for the month ending 5 December 2026 is due by 19 December 2026, the same day as the contractor’s return (see CIS monthly returns and penalties).

Which subcontractors must receive one?

CISR12160 says a statement must go to every subcontractor from whom a deduction was made, whether at the standard 20% rate or the higher 30% rate. A subcontractor with gross payment status suffers no deduction, so no statement is required, although paragraph 3.15 of the CIS 340 guide describes giving one as good practice. Subcontractors aiming for gross status can read CIS gross payment status.

Where the subcontractor asks for payment to go to someone else, such as a debt factor, CIS 340 paragraph 3.17 says the statement must still be made out in the subcontractor’s name and given to the subcontractor, so that the right person gets credit for the deduction.

What does a statement contain, and how can it be given?

The contractor can choose the layout, but CISR72060 lists the minimum content: the contractor’s name and employer’s tax reference; the tax month end date, or the payment date if the statement covers one payment; the subcontractor’s name and Unique Taxpayer Reference; the verification number where a higher rate deduction was made because the subcontractor could not be matched; the gross payment; the cost of materials that reduced the amount subject to deduction; and the amount deducted. How those figures are worked out is covered in how CIS deductions treat materials, and how they are reconciled in bookkeeping for CIS deductions.

A statement can cover all payments in the tax month or each payment separately, provided at least one is issued for each tax month in which a deduction was made. Regulation 4(9) allows electronic delivery only if the contractor has said it intends to use it, the subcontractor has consented and not withdrawn consent, and the format can be stored and printed. CISR12160 confirms email qualifies on those terms. A contractor that simply emails statements without that agreement has not met the rule.

What happens if a statement is late, wrong or never given?

The CIS 340 guide (paragraph 4.20) says HMRC may charge a contractor penalties of up to £3,000 if it fails to give statements to subcontractors paid under deduction, or negligently or deliberately puts incorrect information on them. Paragraph 3.15 adds that regularly failing to give statements may be taken into account in deciding whether the contractor keeps its own gross payment status as a subcontractor.

Corrections follow the payment. CIS 340 paragraph 4.9 says that where an overpayment is recovered by stopping the cheque or by the subcontractor returning it uncashed, the contractor should reissue the payment, retrieve and reissue the statement and report the error on the earlier return. Where a later balancing payment or reduced payment puts things right, the statements for each month reflect what was actually paid in that month.

A lost statement can be replaced. CISR72060 says the contractor may issue another copy, which must be clearly marked “Duplicate” so it cannot be confused with the original if that turns up.

How do sole traders and partners use statements?

GOV.UK tells subcontractors that they will need the monthly statements from their contractors when reporting their taxes. A sole trader or partner adds them up for the tax year and enters the gross pay as income and the total deductions as CIS deductions on the Self Assessment return. HMRC then sets the deductions against the tax due. The detail, including the boxes and deadlines, is in claiming back CIS deductions as a sole trader.

CISR75020 says the subcontractor may send the statements with the return but does not have to. Instead, when the return is processed, HMRC automatically compares the deductions claimed with the payments shown on all of that subcontractor’s contractors’ monthly returns. CISR72060 adds that a statement cannot support a repayment on its own; a claim must be made through the return, or on form CIS40 or CIS41 where an in year repayment is allowed, such as after the trade ceases.

How do limited companies use statements?

A company subcontractor does not wait for a tax return. GOV.UK says it reports CIS deductions suffered for the year to date on its Employer Payment Summary, and HMRC sets them against the PAYE it owes. GOV.UK also tells companies to keep the monthly statements they receive. Year end repayments and HMRC’s checks on company claims are covered in reclaiming CIS deductions as a limited company.

What does HMRC check before giving credit?

CISR72060 says HMRC must establish that the contractor submitted a monthly return showing the payments and deductions, and that it agrees with the statement. Where the two do not agree, HMRC may not be able to accept the claim. Three further rules follow from the manual:

  • Only deductions actually made count. CISR72070 says that if a subcontractor was paid gross when a deduction should have been made, no credit is due, even if the contractor later pays the missing amount to HMRC, because section 62(2) of the Finance Act 2004 treats only the sum deducted as tax paid.
  • Disputes go to HMRC. Under CISR72130, if the parties disagree about whether the work was within the scheme or about the materials allowance, either can ask HMRC for help, and the contractor must still make and pay the deduction in the meantime.
  • Statements are records in their own right. Section 12B(4A)(b) of the Taxes Management Act 1970 excludes these statements from the rule that allows a person to keep only the information in a record, so the statements themselves must be preserved.

What does a typical month look like?

Illustration only. A contractor pays a plasterer three times in the tax month ending 5 January 2027: gross £1,200, £900 and £1,400, with no materials, at the 20% rate. It can issue one statement by 19 January 2027 showing gross payments of £3,500 and deductions of £700, or three separate statements of £240, £180 and £280. Either way, the monthly return filed by the same date must show the same totals for that subcontractor. If the plasterer later claims £720, HMRC’s match against the return will show a £20 gap that the plasterer will need to explain.

What mistakes come up most often?

  • Not issuing a statement at all, especially to occasional subcontractors.
  • Emailing statements without the subcontractor’s agreement.
  • Putting a higher rate deduction on a statement without the verification number.
  • Issuing a replacement without marking it as a duplicate.
  • Subcontractors claiming from invoices or bank receipts instead of statements, which may not match what the contractor reported.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.