Proper record-keeping is the foundation of CIS compliance. As your construction accountant, I’ll explain exactly what records you need to keep and how to maintain them effectively.
Required CIS Records
Contractor Records
- Subcontractor verification details
- Payment records
- Deduction calculations
- Monthly returns
- CIS statements issued
Subcontractor Records
- CIS statements received
- Payment records
- Material costs
- Deductions suffered
- Verification references
Record Retention Requirements
Minimum Retention Periods
- CIS records: 3 years
- Tax records: 6 years
- Employment records: 3 years
- VAT records: 6 years
- Company records: 6 years
What Format to Use
- Digital records acceptable
- Paper records allowed
- Mixed systems permitted
- Backup copies required
Essential Documentation Systems
Payment Records
- Invoice copies
- Payment dates
- Amount details
- Deduction calculations
- Material costs
Verification Records
- Verification references
- Dates of verification
- Contractor details
- Status confirmations
- Change records
Monthly Returns
- Submission copies
- Payment summaries
- Correction notices
- Nil return records
- Amendment details
Digital Record-Keeping Solutions
Software Options
- CIS-specific software
- Accounting packages
- Document management
- Cloud storage
- Backup systems
Implementation Steps
- Choose appropriate software
- Set up user access
- Create backup procedures
- Establish workflows
- Train staff
Best Practices
Organisation
- Consistent filing system
- Clear naming conventions
- Regular backups
- Access controls
- Audit trail
Maintenance
- Monthly reviews
- Quarterly checks
- Annual audits
- System updates
- Staff training
Common Record-Keeping Mistakes
Incomplete Records
- Missing verification details
- Incomplete payment records
- Lost statements
- Missing calculations
- Incomplete trails
Poor Organisation
- Mixed tax years
- Unclear filing
- Missing backups
- Inconsistent systems
- Delayed recording
HMRC Requirements
Accessibility
- Records available on request
- Readable format
- Complete information
- Clear audit trail
- Timely production
Compliance
- Data protection
- Information security
- Retention periods
- Format requirements
- Access controls
Need More Help?
In our next post, we’ll cover “Managing CIS Disputes and Appeals“.
Stay compliant and profitable,
Want CIS off your desk?
We run CIS end to end for construction limited companies turning over £500,000 to £5 million. Verification, monthly returns, deduction statements and the year end reconciliation.
Common questions
How long do CIS records have to be kept?
Three years from the end of the tax year they relate to. That covers the payments made, the cost of materials, the deductions taken, and the verification numbers HMRC gave you for each subcontractor. In practice most construction companies keep them for six years to line up with the Companies Act requirement for company records.
What has to be on a CIS payment and deduction statement?
The contractor's name and employer reference, the subcontractor's name, unique taxpayer reference and verification number where a higher rate deduction applied, the gross amount of the payment excluding VAT, the cost of materials deducted, and the amount of tax withheld. Statements have to be issued within 14 days of the end of the tax month.