How to use it
- 1Add one row per contractor per tax month, from the payment and deduction statement. Tax months end on the 5th.
- 2Enter the gross payment without VAT, the materials the contractor didn't deduct on, and the CIS deducted.
- 3Check the deduction against labour. It should be about 20% if you're registered and verified; 30% means the contractor couldn't verify you.
- 4Mark whether you have the statement. Contractors must give it within 14 days of the end of each tax month.
- 5At the tax year end, the Summary gives total gross pay and total CIS deductions for your return.
What each field means
- Tax month ending
- The 5th of the month the statement covers.
- Contractor
- Who paid you.
- Contractor reference
- The contractor's employer reference from the statement.
- Gross payment
- What the contractor paid before deductions, without VAT.
- Materials
- Materials you paid for, plant hire and consumables. No deduction is taken on them.
- Labour
- Gross payment less materials: what the deduction applies to.
- CIS deducted
- The deduction shown on the statement.
- Deduction as percent of labour
- A check that the right rate was used.
What the contractor deducts, and on what
Under the Construction Industry Scheme, a contractor deducts 20% from your payments if you're registered and they can verify you, and 30% if either doesn't apply. With gross payment status, nothing is deducted and you pay your own tax.
No deduction is taken on the VAT you charge, consumables, plant hired for the job, or materials you paid for yourself. The contractor may ask for evidence of your materials costs, and will estimate them if you have none.
Claiming the deductions back
Sole traders and partners enter total pay before deductions as income on the Self Assessment return, and the total deductions as CIS deductions. HMRC takes them off the tax you owe and repays any excess.
A limited company sets its deductions against its PAYE bill by entering the year-to-date total on the Employer Payment Summary. GOV.UK warns not to use the Corporation Tax return for this. Keep the statements either way: HMRC may ask for evidence.
Licence and disclaimer
Free to use, copy and adapt for your own business or personal records. Please don't resell it or republish it as your own template.
A template is a starting point, not advice for your circumstances. Check the result against the GOV.UK guidance linked below, or ask an accountant.
Related
What else will you need?
- ChecklistCIS subcontractor checklistConstruction subcontractors register for CIS with their legal business name, UTR, VAT number if registered and trading start date.PDF
- Where to find itFind a CIS verification numberA CIS verification number is the reference HMRC gives a contractor when it verifies subcontractors before paying them.
- SA103SA103 self-employment pagesSA103 is the self-employment section of the Self Assessment return.
- TemplateSole trader income and expenses trackerA sole trader income and expenses tracker records every sale and business cost through the tax year, so the self-employment pages of your tax return come straight from the totals.PDFExcel
Rather we did it?
Countify can handle this for you, for a fixed fee agreed upfront.
Questions
Frequently asked questions.
What if a contractor hasn't sent my statement?
Ask them for it. If you can't get it, for example because the contractor has gone out of business, write to HMRC with your details, the contractor's details and the payment dates.
Why was 30% deducted?
The higher rate applies if you're not registered for CIS or the contractor couldn't verify you. Check the UTR and business name you gave match your registration.
Do I still need to keep expense records?
Yes. The register covers pay and deductions. Your business costs still need their own records, such as the sole trader income and expenses tracker.
Checked against GOV.UK on · Reviewed by Kamran Ishaq FCCA, Founder & CEO, on .
Sources: What is the Construction Industry Scheme (opens in a new tab) (HM Revenue & Customs); What you must do as a CIS subcontractor (opens in a new tab) (HM Revenue & Customs); CIS subcontractors: get paid (opens in a new tab) (HM Revenue & Customs); CIS subcontractors: pay tax and claim back deductions (opens in a new tab) (HM Revenue & Customs).