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HMRC internal manual

Construction Industry Scheme Reform Manual

The Scheme: overview: making scheme payments to registered subcontractors paid under deduction at the standard rate

Before making a payment to a subcontractor, the contractor should first ensure that the contract with the subcontractor is properly one of self-employment. The contractor must then

  • verify the subcontractor, where the contractor needs to do this (See CISR51000 for more guidance on verification).

On making payment, the contractor should then

  • calculate and make the appropriate deduction from the payment to the subcontractor, and
  • record details of the payment, materials and CIS deduction made.

Within 14 days of the end of the tax month in which the payment, or payments, were made, the contractor must

  • give a ‘payment and deduction statement’ to the subcontractor, showing how much has been paid and how much was deducted for the tax month just ended. This statement can be issued for each separate payment where it is more convenient for the contractor to do so - but there must be at least one statement for each month in which the subcontractor receives a payment. See CISR12160 for more details about the statement of deduction)
  • pay over the sums deducted to HMRC.