CIS deduction statement explained + template (UK, 2026)

The Reality: If you don’t collect CIS deduction statements, you’ll spend January guessing what HMRC already took — and you can end up paying tax twice (once via CIS deductions, then again via self-assessment because you can’t prove it).

This is not tax advice. If you’re VAT registered, on self-billing, or you’re unsure what the contractor is deducting CIS from, confirm the calculation rules with your accountant.

If you’re new to CIS, start here: Complete CIS Tax Guide for Subcontractors 2026.

CIS deduction statement explained (UK) + template

What a CIS deduction statement is (and what it’s not)

A CIS deduction statement (often called a “payment and deduction statement”) is the contractor’s proof of:

• what they paid you (gross)
• what rate they used (20%/30%/0%)
• what they deducted and sent to HMRC
• what they actually transferred to your bank (net)

It is not the same as:

• your invoice (you usually invoice the gross amount)
• a generic remittance advice (which may not show the CIS calculation base/rate)

When you should receive one

Typically each time you’re paid (or monthly if the contractor batches payments), you should get a statement covering that payment period.

If you’re still fighting formatting/payment delays, fix your invoice first: CIS invoice template (UK) for subcontractors.

The CIS deduction statement template (copy/paste)

Use this as a checklist when you receive a PDF/email statement, or as a template to request from a contractor who sends vague remittances.

CIS PAYMENT & DEDUCTION STATEMENT

Contractor details
- Contractor name:
- Contractor UTR:
- Contractor address:
- Contact (accounts email/phone):

Subcontractor details
- Subcontractor name:
- Subcontractor UTR:
- Verification reference (if provided):
- Deduction rate applied: 0% / 20% / 30%

Payment period
- Tax month (6th–5th):
- Payment date:
- Site / job reference:

Calculation
- Gross amount (labour element subject to CIS):
- Materials excluded (if applicable):
- VAT (if applicable):
- CIS deduction amount:
- Net paid:

Payment confirmation
- Payment method (bank transfer):
- Bank reference:

Notes
- Invoices covered (numbers/dates):

How to reconcile a payment in 60 seconds (so nothing drifts)

You’re checking for two common problems: (1) wrong rate, (2) wrong base (deducting against materials or the full invoice when they shouldn’t).

Quick worked example

Your invoice:

• Labour: £1,000
• Materials: £200
• Total invoiced: £1,200

Your statement should typically show:

• CIS base (labour): £1,000
• Rate: 20% (if registered)
• CIS deducted: £200
• Net paid: £1,000

If it shows they deducted CIS on £1,200 instead of £1,000, you’ll see:

• CIS deducted: £240 (at 20%)
• Net paid: £960

That’s the red flag to fix immediately.

The three red flags that mean “email accounts today”

1. 30% rate when you’re registered (usually they haven’t verified your UTR correctly).
2. CIS deducted on materials because your invoice didn’t split labour/materials or they ignored it.
3. Missing statements for payments (you can’t reconcile, and year-end becomes a mess).

To stop #2 recurring, standardise your invoice layout: CIS invoice template (UK) for subcontractors.

Request email template (copy/paste)

Subject: CIS deduction statement request for [month] / payment on [date]

Hi [Name],
Can you please send the CIS payment and deduction statement for the payment made on [date] covering invoice(s) [invoice numbers]?

I need the statement showing the deduction rate used (0/20/30), the gross amount subject to CIS, the CIS deducted, and the net paid, so I can reconcile my records.

Thanks,
[Your name]
[Business name]
[UTR]

Where this fits in the “no surprises” CIS stack

• Invoice correctly (UTR + labour/material split): CIS invoice template
• Collect every statement (this page)
• Keep your deadlines clean (if you pay subcontractors): CIS monthly return deadlines and penalties (2025)
• Graduate to 0% deductions: CIS gross payment status (UK) — eligibility and how to apply

Where Toolfy fits

The hard part isn’t “CIS exists” — it’s keeping invoices, evidence, and deduction records together so your accountant can file quickly and correctly. Toolfy is built for UK VAT/CIS workflows so you can keep your paperwork tidy without spreadsheets. Start a free trial if you want to set it up quickly.