What has to be on a CIS payment and deduction statement?

The required contents

• The contractor's name and employer reference
• The tax month the payment falls in, and the date of payment
• The subcontractor's name, unique taxpayer reference and verification number
• The gross amount of the payment, excluding VAT
• The cost of any materials that reduced the amount the deduction was charged on
• The amount deducted

Where a deduction has been made at the higher rate, the verification reference must appear complete with the letter on the end of it. That suffix is the evidence of an unmatched verification, and it is what tells a subcontractor why they are on 30%.

The deadline

A statement must be issued for each tax month in which a payment was made, within 14 days of the end of that tax month. It is a legal duty, and one of the obligations most often missed by contractors who otherwise file on time.

Why it matters to you

The statement is the only document that shows what was deducted and on what basis. A bank receipt shows a net figure and nothing else — it cannot tell you whether the materials figure was right, whether travel was correctly left inside the base, or why the rate was what it was. When it comes to reconciling CIS suffered for a refund claim or a company's EPS offset, the statements are the evidence and the bank is not.

If you are not receiving them, ask. If they do not arrive, HMRC holds what the contractor reported against your UTR.

This question is part of CIS returns and verification, which covers the whole area.