What Is A CIS Payment & Deduction Statement?

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When a contractor makes a CIS deduction they must provide the subcontractor with a CIS payment and deduction statement. This is evidence to show the subcontractor what deductions have been made and which they can use as evidence to provide any tax deductions to HMRC.

The CIS payment and deduction statement must be provided within 14 days of the end of the tax month in which the payment was made. The tax month ends on the 5th of each month so the reporting deadline will be the 19th.

If you pay a subcontractor multiple times in one month, all relating payments to that month can be included in one CIS payment and deduction statement. You can issue individual statements for each payment if you wish.

Xero (and others) produce the CIS Payment and Deduction Statement for you. The CIS payment and deduction statement must show the following information:

• The contractor’s name

• The contractor’s employer tax reference number

• The month to which the payment relates, for example, the month-end August 2021

• The subcontractor’s unique tax reference number

• The verification number provided by HMRC during the verification process (only required for higher rate deductions at 30%)

• The gross amount

• The CIS qualifying materials amount

• The CIS tax amount

If you need any support in producing Payment and Deduction Statement, feel free to reach out to our team and they would be happy to help you. For more information regarding CIS take a look at our CIS Resource Hub.