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HMRC internal manual

Compliance Operational Guidance

HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: construction industry scheme (CIS): scheme overview: CIS - from 6 April 2007 - payments to a third party -inaccuracy discovered

If a contractor makes a payment to a third party, without deduction, where

  • the third party is not a debt factor and
  • either the subcontractor or the third party is not registered for gross payment


a contractor makes a payment to a third party, including to a debt factor, and makes deductions at the standard rate

  • where the subcontractor is unmatched

the caseworker should

  • draw the contractor’s attention to paragraph 6.9 of booklet CIS340
  • explain to the contractor how to make any necessary adjustments for the current month and
  • seek recovery for earlier months where appropriate.