What if my contractor has not paid my CIS deductions to HMRC?

You still claim what was actually taken, on your 2026-27 tax return if that is when it was deducted. HMRC's CIS manual says that after the year ends it allows the credit you claim, unless it opens an enquiry.

Under the Construction Industry Scheme (CIS), the contractor takes the deduction, gives you a payment and deduction statement, files a monthly return by the 19th and pays HMRC. Section 62 of the Finance Act 2004 treats a sum "deducted ... and paid" to HMRC as Income Tax paid for you. So when a contractor keeps the money, or does not file the return, your credit can be questioned. HMRC's internal CIS manual sets out how it deals with that.

What HMRC's manual says

One limit applies throughout. The manual says credit is for an amount that was actually deducted from you, not an amount the contractor should have deducted. If a contractor paid you gross by mistake and later asks you to repay them, HMRC gives credit only once it confirms the contractor has paid and you show you reimbursed them.

The evidence that counts

Your payment and deduction statement is your receipt. HMRC's manual says it must show the contractor's name and employer tax reference, the tax month or payment date, your name and Unique Taxpayer Reference (UTR), the gross payment, any materials cost, and the deduction. If you were paid at 30%, it must also show your unmatched verification number.

The bank side matters just as much. Say you invoice £4,000 of labour a month and the contractor takes 20%. Each statement should show £800 deducted, and your bank should show £3,200 arriving. Three months of that is £2,400 of deductions you can prove, statement by statement and payment by payment.

Keep originals, and keep them unaltered. The manual says a statement that conflicts with what the contractor reported, such as a larger deduction or a different date, is referred for further checks.

What this means for you

You are not the one who has to recover the money from the contractor. CIS 340 says a contractor must pay deductions to HMRC every month and is responsible for the amount even where no deduction was actually made. If a contractor files late, GOV.UK lists penalties starting at £100 for a return 1 day late. Chasing them is HMRC's job.

Your job is the paper trail. With statements and matching bank entries, a missing contractor return should not stop you claiming on your Self Assessment return. Without them, an enquiry can cut your claim down to what you can show. The informal early repayment needs the contractor to have paid, so unless you have stopped trading, expect the claim to go through your tax return. The CIS refund delay guide covers what slows things down.

Making Tax Digital changes the mechanics. It already applies to sole traders whose self-employment and property income before costs was over £50,000 in 2024-25, and from 6 April 2027 to those over £30,000 in 2025-26. GOV.UK says HMRC then adds your CIS deductions to your tax return, you must check them, and you make any corrections in your software before you submit. A refund cannot be claimed in that return. It is requested separately through HMRC online services.

Steps to raise it with HMRC

1. Ask the contractor for any missing statements. They are due within 14 days of the end of each tax month, and a replacement must be marked "Duplicate".
2. Match every statement to the payment in your bank account, and note any month with no statement.
3. Call the CIS helpline on 0300 200 3210 (Monday to Friday, 8am to 6pm) and ask what deductions HMRC has recorded for you for the months you were paid.
4. If you cannot get statements, for example because the contractor has closed, write to PT Operations, HM Revenue and Customs, BX9 1BX. Give your name, address and UTR, the contractor's name and address, their tax reference if you know it, the dates or tax months you were paid, and why you have no statements.
5. Claim the deductions actually taken on your tax return for that year, and keep the evidence together in case HMRC asks.
6. If HMRC corrects your return, you have 30 days to reject the correction. After an enquiry, you can ask for a review or appeal.

The free MTD check shows when Making Tax Digital starts for you, and the trades section explains how your CIS deductions are matched to your statements and counted in your tax return.