ECH21230 - CIS from 06-04-07 - Providing a Subcontractor with an Incorrect Written Statement of Payments and Deductions Made


Regulation 4(8) Income Tax (Construction Industry Scheme) Regulations 2005 requires a contractor to provide a written statement of payments to each subcontractor no later than 14 days after the end of each tax month. This statement is often called a payment statement. The statement must include the information detailed at ECH14620.

A contractor who


  • fraudulently or negligently

provides incorrect written statements may be liable to a penalty under S98(2) TMA 1970. The maximum penalty is £3,000.

Wherever a contractor has provided false information on a payment statement you must


  • establish the reasons why false information was provided ( ECH8045).
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

  • where the contractor has purposely constructed false pay statements to take money from the business or
  • where the contractor and subcontractor have colluded in the use of false pay statements to generate repayments or take money out of the business.
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Where a penalty is appropriate you can contact TAA, Liverpool. (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

TAA will provide guidance on the appropriate amount of penalty to be sought.

Where a contractor is also a subcontractor and is registered for Gross Payment you must consider whether any failure to comply with CIS is sufficient to warrant a change in tax treatment. Further guidance is at


  • ECH14650 Cancellation of Gross Payment Registration

In cases of doubt or difficulty advice can be sought from TAA Liverpool (This text has been withheld because of exemptions in the Freedom of Information Act 2000)