What is a CIS statement?
The Construction Industry Scheme (CIS) is used by HMRC to collect income tax throughout the year from people working in the construction industry.
Construction companies deduct tax on behalf of their workers (subcontractors) and send the money to HMRC as tax payments:
- 20% for workers who have registered themselves as subcontractors with HMRC
- 30% for those who have not
Note that CIS only applies if you work in construction as a subcontractor and you have registered for CIS.
If you’re a construction worker working on CIS, it’s important that you know what a CIS statement is. In this post, we’ll cover everything you need to know about this document.
What’s a CIS statement?
A CIS statement is simply a written document that you’ll receive from the company you work for stating the tax deductions made.
You’ll receive a CIS statement every time you get paid, as it’s a legal requirement for construction firms. In fact, employers must issue a CIS statement within 14 days of every tax month's end.
Note that a tax month finishes on the 5th of every month, so you might receive your CIS statement later than your salary.
It’s important for you to keep the CIS statements you receive, firstly because they’ll be reviewed during your CIS tax rebate procedure, and they’re also useful in the event that HMRC checks your tax compliance.
What does a CIS tax statement include?
The first thing to say is that there’s no set format for a CIS statement, but it must include some information. Specifically:
- Contractor’s details, such as name, address, and tax reference.
- End date of the tax month in which the payment and deduction have been made (05 MM YYYY).
- Your details (subcontractor), such as your name, UTR number, and your verification number (this must be included only if the deduction made was at the higher rate).
- Gross payment (excluding VAT).
- Business costs (excluding VAT), such as materials.
- The CIS deduction’s amount.
- The final amount paid to you.
How can Earnr help?
Earnr allows you to track your ingoings and outgoings over the course of the year, and automate your tax return. You mark each payment and each expense as you go so that by the time you get to do your tax return, we’ll have everything we need to do the process for you.
The good news is that Earnr can manage your tax return for you for just £99. You can download the app and make use of our other features for free!
Check it out here.