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HMRC internal manual

Construction Industry Scheme Reform Manual

Deductions: credit and repayment: contractor role

CISR72600 Action guide contents

Payment and deduction statement

The contractor must give every subcontractor from whom a deduction is made a Payment and Deduction Statement (PDS) as evidence of all payments and deductions made in each tax month - a tax month runs from the 6th of one month to the 5th of the next.

It is good practice for the contractor also to give a subcontractor a payment statement where the payment has been made gross, but there is no obligation to do so.

The contractor should give or send the PDS to the subcontractor within 14 days of the end of the tax month to which it relates. The statement can be issued electronically, where both parties agree to this method, and the statement is in a form that allows the subcontractor to store and print it. The statement may also be given by fax.

See CISR72060 for further guidance relating to Payment and Deduction Statements.

Payments to nominees

Where the subcontractor nominates someone else to receive the payment on their behalf the contractor must still give or send the PDS to the subcontractor. This is to help the subcontractor keep the necessary records to claim credit or repayment for the deductions shown.

Monthly return and paying over deductions

The contractor must submit a monthly return (CIS300) to HMRC showing payments made to all subcontractors, whether paid gross or under deduction, as well as any deductions made as appropriate.

Monthly returns can also be submitted over the Internet or electronically using appropriate third-party software.

The contractor must pay over all deductions they are obliged to make from subcontractors in any tax month, to reach HMRC by the 19th day following the end of the tax month to which the deductions relate or by the 22nd day following the end of the tax month to which the deductions relate if payments are submitted electronically.

For contractors who are eligible and pay their deductions quarterly, the tax quarters end on 5 July, 5 October, 5 January and 5 April and payments are due by the 19t h of the month in which the quarter ends - or the 22n d of the month in which the quarter ends if the contractor pays electronically.

See CISR60000 onwards for further guidance on monthly returns.