What a CIS payment and deduction statement is and why it matters
When a contractor pays a CIS-registered subcontractor and takes a deduction, they are required by the Construction Industry Scheme to issue a written record of that transaction. This document is called a payment and deduction statement, often shortened to PDS. It is not optional paperwork. It is the primary evidence a subcontractor uses to prove how much was withheld from them across the year, and that makes it the foundation of every CIS refund claim through Self Assessment.
Under CIS the deduction is an advance against the subcontractor's eventual tax and National Insurance bill. For 2026/27, a registered subcontractor has 20% deducted from the labour element of each payment. An unregistered subcontractor has 30% taken. Because those deductions are applied to labour income before any expenses, the personal allowance or any other relief is brought in, most registered subcontractors overpay across the year and are owed money back. The PDS is the document that tells you, and HMRC, exactly what that overpayment is.
If you are a subcontractor who receives payments from multiple contractors, each one must issue a separate statement for each payment they make to you. At the end of the year you compile those statements to find your total CIS deducted and use that figure in your Self Assessment return. Getting that total right depends entirely on having complete, accurate statements. For the broader picture of how those deductions flow through to a refund, our guide to claiming a CIS tax refund walks through the process from deduction to repayment.
What a CIS payment and deduction statement must show
Regulation 4(8)(a) of SI 2005/2045 (the Income Tax (Construction Industry Scheme) Regulations 2005) sets out the information a PDS must contain. A statement that is missing any of the eight statutory fields is deficient, and if a contractor regularly issues incomplete statements that is itself a compliance failure you can report. Two further fields (marked below) are not in the regulation but appear on virtually every real-world statement as a standard practice convention; they are useful checks but their absence does not put a contractor in breach. The table below lists all fields, with their basis noted.
| Field | Basis | What it shows | Example value |
|---|---|---|---|
| Contractor's name and address | Statutory (Reg 4(8)(a)(i)) | Identifies the business making the payment | Harwood Build Ltd, 12 Industrial Estate, Leeds, LS1 4AB |
| Contractor's employer reference | Statutory (Reg 4(8)(a)(ii)) | Links to the contractor's PAYE/CIS scheme | 123/AB45678 |
| Tax month or date of payment | Statutory (Reg 4(8)(a)(iii)) | The period or date the payment covers | 14 May 2026 |
| Subcontractor's name | Statutory (Reg 4(8)(a)(iv)) | Identifies the person or business being paid | J. Okafor (sole trader) |
| Subcontractor's UTR | Statutory (Reg 4(8)(a)(v)) | HMRC reference for the subcontractor | 98765 43210 |
| Gross amount of payment | Statutory (Reg 4(8)(a)(vi)) | The full value of the work before any deduction | £2,400.00 |
| Cost of materials | Statutory (Reg 4(8)(a)(vii)) | The materials element excluded from the deduction base | £800.00 |
| Amount of CIS deducted | Statutory (Reg 4(8)(a)(viii)) | The actual pound figure withheld and paid to HMRC | £320.00 |
| Contractor's UTR | Practice convention (not legally required) | HMRC reference for the contractor; commonly included by accounting software | 12345 67890 |
| Net payment to subcontractor | Practice convention (not legally required) | What the subcontractor receives in their bank account; useful for bank reconciliation | £2,080.00 |
The materials field in that table is one of the most important and most frequently handled badly. CIS deductions apply to the labour element only. The cost of materials the subcontractor buys for the job is excluded from the deduction base. In the example above, the 20% is applied to the £1,600 labour element, not the £2,400 gross invoice. A contractor who applies the rate to the full gross amount is over-deducting, and the PDS will show the error if each field is filled in correctly. Always check the materials figure against what you actually spent on materials for the job, because if it is wrong it affects both the deduction amount and your refund claim.
The 14-day issuance rule
A contractor must issue a payment and deduction statement within 14 days of the end of the tax month in which the payment was made. That is a fixed statutory window, not a target. Tax months run to the 5th, so the 14-day clock runs from the 5th and the statement is due by the 19th of the following month, the same date as the contractor's CIS300 return. A payment made on 10 June falls in the tax month ending 5 July, so the statement for it is due by 19 July. A contractor can issue statements payment by payment, but cannot run past the 19th-of-the-following-month deadline for any payment in the month.
This matters in practice for two reasons. First, it means subcontractors working across multiple jobs with multiple contractors should expect to receive statements monthly, and gaps in the flow of statements are an early warning sign that something has gone wrong. Second, each statement ties to the payment it covers, which makes it easier to reconcile against your bank records: the net figure on the statement should match a specific entry in your bank account on or around the payment date.
Compiling your year-end total: no statutory annual statement
It is a common misconception that a contractor must provide a single annual CIS statement, similar to a P60, by a fixed date such as 31 May. There is no such obligation in the CIS scheme. The statutory duty is the per-payment statement covering each tax month, issued by the 19th of the following month. There is no annual CIS return and no statutory year-end CIS certificate.
That means the responsibility for arriving at your year-end total sits with you, built from the monthly statements you have collected. In practice many contractors will, as a courtesy, produce a year-end summary of the total payments and CIS deducted if you ask, and it is always worth requesting one from each contractor after the tax year ends because it gives you a single reconciled figure to check your own running total against. But it is a goodwill summary, not a document the contractor is legally required to provide, so you should not rely on receiving one. Keep every monthly statement as it arrives, and your total is always available regardless of whether a contractor obliges. The mechanics of what happens to those totals in your return are covered in our guide to the CIS self-assessment calculator.
What to do if a contractor does not issue a statement
If a contractor fails to issue a payment and deduction statement, there is a clear escalation path.
Step 1: Request in writing. Contact the contractor by email or letter and ask for the statement, referencing the specific payment date and amount. A written request creates a dated record that you can use later. Give the contractor a short but reasonable window to respond, typically five to ten working days.
Step 2: Escalate to HMRC. If the contractor does not respond or refuses, you can report the failure to HMRC's CIS helpline on 0300 200 3210 (Monday to Friday, 8am to 6pm). HMRC can investigate the contractor's compliance and impose penalties for non-issuance. The contractor faces a fixed-penalty regime for failing to meet their CIS obligations, and the statement requirement is a statutory duty, not a courtesy. Keep all correspondence because if HMRC investigates, your written record of the request demonstrates you took reasonable steps.
The contractor's CIS300 monthly return to HMRC will include the payments they made to you, including the amounts deducted. This is the corroborating record that helps HMRC pursue the matter and that can also support your refund claim if statements are ultimately not recovered. The monthly return obligations are covered in detail in our guide to the CIS monthly return.
GPS holders and payment and deduction statements
Gross payment status (GPS) holders are paid at the 0% rate, which means no CIS deduction is taken from their payments. Because no deduction is made, there is no payment and deduction statement to issue. A GPS holder simply receives the full invoice value in their account without any withheld amount.
The contractor still includes GPS holders in their monthly CIS300 return to HMRC, recording the gross payments made. But nothing is withheld, so no PDS is generated, and a GPS holder does not need to compile deduction statements for their tax return in the same way that a 20% subcontractor does. The GPS holder's tax falls due through Self Assessment or Corporation Tax, settled directly, rather than through the refund mechanism that arises from over-deduction.
If you are currently on the 20% rate and believe you might qualify for GPS, our guide to gross payment status sets out the three qualifying tests and the April 2026 anti-fraud changes in detail.
Worked example: compiling CIS deducted from multiple contractors
Consider a sole-trader plumber who works across four contractors in 2026/27. Over the year the payments and deductions from the four sites look like this.
| Contractor | Gross payments received | Materials allowed | Labour (deduction base) | CIS rate | CIS deducted |
|---|---|---|---|---|---|
| Contractor A | £18,000 | £4,000 | £14,000 | 20% | £2,800 |
| Contractor B | £12,000 | £2,500 | £9,500 | 20% | £1,900 |
| Contractor C | £9,000 | £1,000 | £8,000 | 20% | £1,600 |
| Contractor D | £6,000 | £500 | £5,500 | 20% | £1,100 |
| Total | £45,000 | £8,000 | £37,000 | £7,400 |
The plumber collects each contractor's individual monthly PDSs across the year, then takes the CIS deducted column and totals it: £7,400. That figure goes into the CIS deductions box on the self-employment pages of the Self Assessment return. HMRC offsets it against the plumber's actual tax and Class 4 NIC liability for the year. Once expenses, the personal allowance (£12,570 for 2026/27) and reliefs are applied, the actual liability will almost certainly be lower than £7,400, which means a refund is owed.
The worked example is illustrative, but the principle is universal: without the PDSs from each contractor, the plumber cannot accurately complete the CIS deductions box, cannot defend the figure if HMRC queries it, and risks either underclaiming or having a refund delayed by a mismatch query. To estimate what you might be owed before you file, our CIS refund estimator gives a working figure based on your gross payments and expenses.
Missing statements and your Self Assessment return
If statements are missing when you come to file, do not simply leave the deduction box blank or delay filing. The practical approach is to estimate the CIS deducted for the missing payments using your bank records: the net amount received in your account, combined with what you know the gross and materials split to be, lets you work backwards to the deduction taken. Note on your return that certain statements were not received despite your request, and include your estimated figures.
HMRC can check the figures you claim against the contractor's CIS300 monthly returns, which record every payment and deduction the contractor made. Where your estimated figures are consistent with what the contractor reported, HMRC will generally accept the claim. The risk is a mismatch, which leads to a query that delays your refund and requires you to provide further evidence. That is why chasing missing statements promptly, and escalating to HMRC if the contractor will not cooperate, is worth the effort before your filing deadline arrives. For a step-by-step walkthrough of the refund claim itself, see our guide to CIS refunds.
Keeping your statement records tidy across the year
The subcontractors who have the smoothest Self Assessment process are the ones who file statements as they arrive rather than hunting for them in April. A simple folder per contractor per tax year, whether physical or digital, with each PDS matched against the corresponding bank entry when it arrives, takes minutes at the time and saves hours at filing. Cross-referencing the net payment on each statement against your bank statement confirms both that you received the correct amount and that the deduction figure is arithmetically consistent with the gross and materials split shown. If a figure does not reconcile, the time to raise it with the contractor is within days of receiving the statement, not months later when memories are faded and the contractor may be between projects.
If you want a specialist to compile your CIS deduction totals, prepare your Self Assessment return and make sure you are claiming every pound you are owed, our team works with CIS subcontractors throughout the year. You can get started by trying our CIS self-assessment calculator to see how the numbers stack up before you commit to filing.