A CIS payment and deduction statement goes to each subcontractor you deducted tax from, within 14 days of the tax month ending, by the 19th. It shows your name and employer reference, the month end, their name and UTR, gross pay, materials, the deduction and, at the higher rate, a verification number. Build all of them from one payment sheet.
That makes it a different job from the monthly return. The return goes to HM Revenue and Customs (HMRC); the statement goes to the person you paid, who uses it to claim credit for the tax you held back. The figures are the same, so the sums belong in one sheet. AI is useful around that sheet, writing formulas, laying out the statement and checking the finished set, but it should never be the thing that adds up the money.
The statement and the return: same figures, different readers
Contractors often treat the two documents as one chore because the numbers match. The contractor guide on gov.uk treats them as separate steps: statements sit under make deductions and pay subcontractors, and the return has its own page. The practical differences are worth a table.
| Payment and deduction statement | Monthly return | |
|---|---|---|
| Who receives it | Each subcontractor you made a deduction from | HMRC |
| What it lists | One subcontractor's payments for the tax month | Every subcontractor you paid that month |
| Deadline | Within 14 days of the tax month end, so the 19th | The 19th |
| What the reader does with it | Claims credit for the deductions on their own tax return | Holds your record of what you paid and deducted |
| Where the figures come from | Your payment sheet | The same payment sheet |
If your question is how to file the return itself, the CIS monthly return tutorial compares software, an accountant and a spreadsheet. The statement is the other half, and the sheet below is what feeds both.
The fields a statement must show, and where each one comes from
The contractor guide, CIS 340 (section 3.15, updated 27 August 2026) lists the minimum content. The official statement form, CISOL1, adds an address box and two lines that make the arithmetic visible, amount liable to deduction and amount payable, so I would include everything in this table.
| Field | Where it comes from | Check before sending |
|---|---|---|
| Your name (the form adds your address) | A settings cell, typed once | Matches your registered details |
| Employer's Tax Reference | A settings cell, copied from your payroll records | Read it back character by character; one typo repeats on every statement |
| Tax month end date | A formula from the payment dates | Always the 5th, never the calendar month end |
| Subcontractor's full name | The Subs tab | Same spelling as on your verification record |
| Unique Taxpayer Reference (UTR) | The Subs tab | Matches the verification record; never typed into an AI chat |
| Verification number | The Subs tab, for 30% payments only | Present, with any letters, on every higher-rate statement (section 3.8) |
| Gross amount paid, excluding VAT (A) | Sum of the month's payments | Tax taken out, so it equals the invoices' net totals |
| Less cost of materials | The materials column | Receipts held, or the line marked as an estimate |
| Amount liable to deduction | Formula: gross minus materials | Never below zero |
| Amount deducted (B) | Formula: liable times the verified rate | The rate from your latest verification of that subcontractor, not one remembered from last year |
| Amount payable (A minus B) | Formula | Excludes tax, so it may not equal the bank payment |
The guide leaves the layout to you, allows one statement per tax month or one per payment, and allows electronic delivery only where you and the subcontractor agree and they can store and print what you send. If you ever mix per-payment and monthly statements, section 3.19 says later statements should leave out amounts already shown, so nothing appears twice.
Who gets one, and the month's calendar
The duty applies to every subcontractor from whom you made a deduction. A subcontractor paid gross is not owed one. A tax month runs from the 6th to the 5th, so a payment on 5 June belongs to the month ending 5 June and a payment on 6 June belongs to the next. The guide's own example is the tax month 6 May to 5 June, with the statement due by 19 June.
| Date | What happens | Whose rule |
|---|---|---|
| 5th | The tax month ends | The scheme |
| By the 8th | Close the sheet: every payment entered, materials evidence chased, rates checked | My suggestion |
| By the 12th | Statements drafted and checked against the sheet | My suggestion |
| By the 19th | Statements in the subcontractors' hands; monthly return filed | The scheme |
| By the 22nd | Deductions paid over, in one payment with any payroll tax for the month (the 19th if paying by post) | The scheme |
The two dates marked as mine exist to buy a week of slack. The statements and the return fall due on the same day, and work done at five o'clock on the 18th is where mistakes creep in.
A payment sheet that fills the statement for you
Use a workbook with two tabs. The Subs tab has one row per subcontractor: an ID such as S01, the name, the UTR, the verified rate (0, 20% or 30%), the verification number for higher-rate payments, the date you verified them and, if they have agreed to PDFs by email, their address. The Payments tab has one row per payment: pay date, Sub ID, invoice reference, gross excluding VAT, materials, an evidence note, then five formula columns that do the rest.
G Tax month end =DATE(YEAR(A2),MONTH(A2)+(DAY(A2)>5),5)
H Rate =VLOOKUP(B2,Subs!$A:$D,4,FALSE)
I Liable =MAX(0,D2-E2)
J Deducted =ROUND(I2*H2,2)
K Payable (A-B) =D2-J2
Two habits keep this honest. First, the sums live in formulas, never in a chat window. Second, once a month's statements have gone out, copy that month's rows, paste them back as values and protect the range. That freezes each row's rate as well, so if a subcontractor's rate changes in October it cannot rewrite what you issued in September, and the next person to open the file cannot change a closed month by accident.
The tax month formula is the one that catches people out, because the calendar month is the obvious thing to group by. A payment dated 1 to 5 of a month goes into the statement ending on the 5th of that same month; a payment from the 6th onwards goes into the statement ending on the 5th of the next. The formula adds one month to the payment date's month only when the day is after the 5th, then returns the 5th.
One awkward tax month, worked through for five subcontractors
Here is the month 6 May to 5 June for a small building firm acting as contractor. The figures are illustrative and kept as whole amounts so the arithmetic is easy to follow. Eight payments sit on the sheet, and two of them belong to a different tax month.
| Paid | Sub | Gross (A) | Materials | Month ends | Rate | Liable | Deducted |
|---|---|---|---|---|---|---|---|
| 2 May | S02 | 900.00 | 0.00 | 5 May | 20% | 900.00 | 180.00 |
| 14 May | S01 | 3,200.00 | 0.00 | 5 June | 20% | 3,200.00 | 640.00 |
| 21 May | S02 | 1,860.00 | 260.00 | 5 June | 20% | 1,600.00 | 320.00 |
| 28 May | S04 | 1,100.00 | 0.00 | 5 June | 30% | 1,100.00 | 330.00 |
| 29 May | S01 | 2,850.00 | 450.00 | 5 June | 20% | 2,400.00 | 480.00 |
| 3 June | S03 | 2,400.00 | 0.00 | 5 June | 0% | 2,400.00 | 0.00 |
| 4 June | S05 | 2,000.00 | 600.00 | 5 June | 20% | 1,400.00 | 280.00 |
| 6 June | S05 | 1,500.00 | 0.00 | 5 July | 20% | 1,500.00 | 300.00 |
Each subcontractor shows up a different way. S01 has two payments and receipts for 450.00 of bricks bought directly. S02 has one payment in the month and another on 2 May that belongs to the previous statement. S03 has gross payment status, so the rate is 0% and no statement is owed. S04 is unregistered, so the 30% rate applies and the statement needs the verification number from your check. S05 sent no receipts, so the 600.00 of materials is an estimate, and the 6 June payment falls into next month.
Filter the sheet to tax month ended 5 June and the summary table writes itself, using SUMIFS on the Sub ID and the month end.
| Sub | Gross (A) | Materials | Liable | Deducted (B) | Payable (A minus B) | Statement due? |
|---|---|---|---|---|---|---|
| S01 | 6,050.00 | 450.00 | 5,600.00 | 1,120.00 | 4,930.00 | Yes, 20% |
| S02 | 1,860.00 | 260.00 | 1,600.00 | 320.00 | 1,540.00 | Yes, 20% |
| S03 | 2,400.00 | 0.00 | 2,400.00 | 0.00 | 2,400.00 | No, paid gross |
| S04 | 1,100.00 | 0.00 | 1,100.00 | 330.00 | 770.00 | Yes, 30%, verification number |
| S05 | 2,000.00 | 600.00 | 1,400.00 | 280.00 | 1,720.00 | Yes, 20%, materials estimated |
| Total | 13,410.00 | 1,310.00 | 12,100.00 | 2,050.00 | 11,360.00 |
Those totals are the control figures. Gross payments of 13,410.00, materials of 1,310.00 and deductions of 2,050.00 are what the monthly return should show across all five subcontractors, and 2,050.00 is the CIS part of what you pay over by the 22nd. If a statement total differs from the return by even a small amount, one of them is wrong before either has been sent.
Here is S04's statement, filled in from the summary row. Names and numbers stay as placeholders because they are filled in locally, after any AI step.
PAYMENT AND DEDUCTION STATEMENT (Construction Industry Scheme)
Payment and deduction made in tax month ended: 05 / 06 / [year]
Contractor
Name: [your business name]
Address: [your business address]
Employer's Tax Reference: [office number] / [reference]
Subcontractor
Full name: [name]
Unique Taxpayer Reference: [UTR]
Verification number: [from the verification, including any letters]
Gross amount paid (excluding VAT) (A): 1,100.00
Less cost of materials: 0.00
Amount liable to deduction: 1,100.00
Amount deducted (B): 330.00
Amount payable (A minus B): 770.00
Please keep this statement safe. You will need it for your tax return.
Two prompts worth keeping, and what to fix in the answers
The first job for an assistant is writing the formulas. Give it the layout of your tabs, not your data, and ask for test rows so you can check its work by hand.
I keep a CIS payment sheet in Excel.
Tab Subs: A Sub ID, B Name, C UTR, D Rate (0, 0.2 or 0.3), E Verification number.
Tab Payments: A Pay date, B Sub ID, C Invoice ref, D Gross excluding VAT,
E Materials to remove, F Evidence. Columns G to K are empty.
Write the row 2 formula for each of these columns:
G tax month end (tax months run from the 6th to the 5th)
H rate, looked up from Subs by Sub ID
I amount liable to deduction (gross minus materials, never below zero)
J deduction, rounded to two decimals
K amount payable (gross minus deduction)
Then give three test rows with the answers you expect, so I can check the
formulas by hand. Formulas only, no macros. I have not pasted any names or
UTRs and you should not ask for them.
A typical first answer (illustrative) looks tidy and is wrong in one column.
G2: =EOMONTH(A2,0)+5
H2: =VLOOKUP(B2,Subs!A:D,4,FALSE)
I2: =MAX(0,D2-E2)
J2: =ROUND(I2*H2,2)
K2: =D2-J2
The G formula returns the 5th of the following month for every payment. A payment on 2 May comes out as 5 June instead of 5 May, so it lands in the wrong statement. Replace it with the DATE formula shown earlier and run your own tests on the boundary dates, 5 June and 6 June, because an assistant's test rows tend to be the easy ones in the middle of the month.
The second job is a read-through of the finished statements before they go out. Replace names and UTRs with the Sub IDs, then paste the statements and the field list.
Below are four CIS statements with names and UTRs replaced by IDs.
Required fields: contractor name and employer tax reference; tax month end
date; subcontractor name and UTR; verification number (only where deducted at
30%); gross amount excluding VAT; cost of materials; amount liable; amount
deducted; amount payable.
For each statement list: any required field that is blank; any line where
liable is not gross minus materials; any line where deducted is not liable
times the rate I give; any 30% line with no verification number.
Do not correct anything. List problems only.
[statements pasted here]
Given a set of statements with three planted errors, an answer like this (illustrative) is what to expect.
S01: no problems found.
S02: tax month end reads 05/05; the other three read 05/06. Check.
S04: rate 30% but the verification number field is empty.
S05: gross 2,000.00, materials 600.00, liable shown as 1,500.00.
Liable should be 1,400.00 if the gross is right. Check the gross.
That is a useful second pair of eyes. It is not a substitute for the control totals, because it reads what is on the page and cannot know that a payment is missing from the sheet altogether.
Quiet errors in CIS figures, with numbers
Grouping by calendar month
Run the worked example with a calendar May filter and the deductions come to 1,950.00 against a correct 2,050.00. The total is only 100.00 out because two errors cancel: S02 is 180.00 too high, picking up the 2 May payment, and S05 is 280.00 too low, missing the 4 June payment. Two statements would be wrong while the grand total looked nearly right. Always compare per subcontractor as well as in total.
A penny of rounding
The guide's own sample statement (Appendix E) shows gross 5,450.36, materials 584.72, liable 4,865.64 and a deduction at 20% of 973.12. Twenty per cent of 4,865.64 is 973.128, so the sample appears to cut the figure to the penny where ordinary rounding would give 973.13. The guide states no rounding rule. Settle one with your accountant, put it into the formula once, and use it for every statement and the return. The sample is also a good test case: feed those figures through your sheet and see which answer you get.
VAT left inside the gross
The contractor guidance starts from the invoice total and takes away VAT, along with consumable stores, fuel (apart from travelling), plant hire, manufacturing or prefabricating materials, and materials the subcontractor paid for directly. The statement has a single "less cost of materials" line, so the costs after VAT in that list all go in your materials column, and the gross line shows the amount with the tax already out. If your gross column holds the tax-inclusive invoice total instead, the deduction is worked out on the tax as well as the work. The gross, the amount liable and the deduction are then all overstated, on the statement and on any return filed from the same sheet, and nothing in the arithmetic will flag it, because the totals still agree with each other.
A rate from memory
The deduction rate is 20%, 30% or 0%, and HMRC tells you which applies when you verify the subcontractor. An assistant asked to fill gaps may happily assume 20% for everyone. Keep the rate in the Subs tab, copy it from the verification response, and record the date you checked.
Estimated materials with no note
Where a subcontractor gives no receipts, the contractor guidance says to estimate the materials. That is allowed, but an estimate with no reasoning behind it is hard to defend later. Mark the line as an estimate in the evidence column and write the basis next to it, for example the supplier's list price for the same items.
Identity numbers pasted into a chatbot
A UTR is a tax identifier for a named person. The assistant does not need it to write a formula or check a layout, so it should never see it. The construction data rules tutorial sets out what to keep out of a chat; for CIS, that means names, UTRs, verification numbers and bank details stay in your sheet.
Five minutes of reconciliation before anything leaves the building
Before a single statement goes out, check these in order. They take longer the first month and about five minutes after that.
- Sum the Deducted column for the tax month and compare it with the summary table total. They must agree to the penny.
- Compare the summary totals with the figures you are about to put on the monthly return: gross, materials and deductions.
- Confirm the deduction total matches the CIS amount in the payment you will make to HMRC.
- Pick three subcontractors and work one statement out by hand from the invoices. One with materials, one at 30%, one paid gross.
- Check every 30% line has a verification number and every statement has the same tax month end.
- Look at payments dated the 4th to the 7th, because that is where a payment can tip into the wrong tax month.
The third step is the one never to skip. The sheet, the return and the payment each come from the same data, so a disagreement means someone typed a figure somewhere else. Finding the slip now takes minutes; finding it after someone else queries a figure takes far longer.
From summary table to one statement per subcontractor
There are three practical ways to turn the summary rows into separate documents, and the right one depends on how many subcontractors you pay under deduction.
- A statement tab with a drop-down. Lay out the statement on its own tab and pull each figure from the summary with a lookup on the Sub ID chosen in a drop-down cell. Print each to PDF in turn. This suits up to about a dozen subcontractors and needs no extra tools.
- A mail merge. Keep the layout in a word processor, merge the summary rows into it, and filter out rows with no deduction. Check the first page and the last page of the merged file against the sheet, because misaligned merges put the right numbers under the wrong name.
- A small script. An assistant can write a macro or a script that loops through the summary rows and saves each statement as a PDF named by Sub ID and month. Test it on a dummy copy of the workbook, ask the assistant to explain each line, and run it on real data only after the dummy output matches by hand.
Sending by email needs one more step. The guide allows it only where you and the subcontractor have agreed and they can store and print what they receive, so ask once and keep the reply with your records.
Subject: Your CIS payment and deduction statements by email
Hi [first name],
From next month I would like to send your CIS payment and deduction
statements as a PDF by email instead of by post. Each one will arrive by the
19th, covering the tax month that ended on the 5th. You can save and print the
PDF as you would the paper copy.
If you are happy with that, please reply "yes" to this email. If you would
rather keep getting paper copies, tell me and nothing changes.
[your name]
A duplicate, a correction and a cheque that never cleared
Statements get lost, and payments sometimes fail. The guide covers three situations, and each needs a different response.
If a subcontractor loses a statement, you can issue another, but it must be clearly marked "Duplicate" so nobody confuses it with the missing one if it turns up later. If you find an error on a return, such as a payment figure with transposed digits, the guide says to correct it through the free CIS online service or the commercial CIS software you filed with. If a cheque is stopped or comes back uncashed after the statement and return went out, the guide's approach is to reissue the payment in the correct amount, retrieve and reissue the subcontractor's statement, and report the error on the earlier return. Because your sheet keeps each payment as a row, correcting one is a matter of editing a row and regenerating one statement, which is far less painful than rebuilding a month by hand.
Keep the earlier version of any corrected statement. It shows what you gave on the day and what changed, which is what an adviser is likely to ask to see.
What to keep, and for how long
The contractor guidance on record keeping asks you to keep the gross amount of each payment invoiced by subcontractors excluding VAT, any deductions made, and, where you made deductions, the materials costs the subcontractor invoiced, also net of tax. Records must be kept for at least three years after the end of the tax year they relate to, and you can be asked to show them at any time. Confirm that period on the current guidance before you build a retention rule on it.
The guidance does not say in so many words that you must keep copies of the statements you issue. I would keep one anyway, filed with the month's sheet. It is the simplest proof of what you gave each subcontractor and when, and the sheet alone cannot show that.
- The month's payment sheet, with closed months locked as values.
- A copy of each statement issued, and of any duplicate or correction.
- The materials evidence: receipts, or the note showing how an estimate was reached.
- The verification record for each subcontractor, with the date you checked it and the rate you were given.
- The reply from any subcontractor who agreed to receive statements by email.
The subcontractor side of this matters too. Subcontractors report the payments and deductions on their own tax return using the statements they were given, which is why a statement with a wrong figure causes them a problem as well as you. For the wider paperwork around onboarding subcontractors, the subcontractor paperwork checklist covers what to collect and when. If you have never asked an assistant to write spreadsheet formulas, the ChatGPT for Excel guide shows the pattern, and why AI is bad at maths explains the reason the sums stay in the sheet.
Questions contractors ask about CIS statements
Do I have to give a statement to a subcontractor I paid gross?
No. The contractor guide says a statement is owed to every subcontractor you made a deduction from, and calls giving one to a gross-paid subcontractor good practice with no obligation. Some contractors issue them anyway so every subcontractor's file looks the same. If you do, show the deduction as 0.00 and keep a copy with the month's papers.
What happens if I send a statement late or leave one out?
The guide says a penalty can apply if you fail to give a required statement, or negligently or deliberately give incorrect information in one, and section 4.20 sets out the maximum. If you spot a gap after the 19th, send the missing statement straight away and tell your accountant, who can advise on whether a penalty is likely.
Must I use the official form, or can I design my own layout?
You can design your own. The guide says contractors can choose the style of their statements as long as the required details are included, and its Appendix E shows a typical statement. The official CISOL1 form is a one-page version of the same thing. A statement built from your sheet is fine if it carries every required field, which is why the field table above is worth reusing as your checklist.
Does the amount payable on the statement match what I paid the bank?
Not always. The statement's gross line excludes VAT, so the amount payable is gross minus the deduction with no tax added back. If the subcontractor's invoice carried tax and you paid it, the bank payment will be higher. Ask your accountant how tax is handled on your jobs, then reconcile bank payments to the sheet separately.
Further reads
- Builder Invoice Template: Stage Payment Requests Written With AI — Stage payment requests that keep labour and materials separate.
- AI for Building Contractors: Chasing Subcontractors and Progress Updates — Chasing materials receipts and paperwork without nagging.
- AI Tools and AI Development: The Complete 2026 Guide — the AI hub, including every tutorial in the AI-for-business series.
Sources: gov.uk 'What you must do as a CIS contractor' (make deductions and pay subcontractors; pay deductions; file your monthly returns; record keeping), the gov.uk payment and deduction statement page and form, and the gov.uk Construction Industry Scheme guide CIS 340 (updated 27 August 2026), read in October 2026.