The purpose of a CIS payment and deduction statement is to provide a record of payments made to subcontractors and the amount of tax that has been deducted under the Construction Industry Scheme (CIS).
The statement is usually provided by the contractor to the subcontractor on a monthly basis and it outlines the gross amount paid to the subcontractor, the amount of tax deducted, and the net amount payable. Subcontractors can use these statements to reconcile their payments with the tax that has been deducted and to ensure that they have paid the correct amount of tax to HM Revenue & Customs.
Contractors are also required to submit these statements to HMRC as part of their CIS reporting obligations.
A payment and deduction statement is more commonly referred to as a CIS payslip or CIS voucher, as it shows the gross and net amounts for a given payment. These payslips can be used as proof of income for a CIS mortgage, where the borrower will be assessed on their gross (before tax) CIS income, as shown on the statements.
