What records should a CIS subcontractor keep?

Why records matter

Your records are your evidence. They show what you were paid, what tax has already been taken through CIS, and what you spent to earn it. Without them you can't fill in a tax return accurately — and you can't claim back CIS or costs you can't prove.

You don't send your records to HMRC. But if HMRC checks your return, you must be able to show where every figure came from.

What to keep

CIS payment and deduction statements

These are the most important papers you have. For every tax month (6th to 5th) a contractor pays you and makes a deduction, they must give you a statement showing:

• the gross amount paid;
• the cost of materials;
• the amount the deduction was worked out on;
• the CIS deducted.

The total of your statements for the year is the figure you enter as CIS deducted on your tax return. Missing one means missing tax you've paid.

Your invoices and income records

• Every invoice you send, numbered in order, showing the labour, materials and any VAT separately.
• A record of payments you receive, including cash jobs and work for homeowners outside CIS.

Receipts for costs

Keep receipts or invoices for every cost you claim: tools, PPE, materials, insurance, phone, van costs, training and anything else. See what expenses you can claim.

Bank statements

Business and any personal account you use for business. They back up both income and costs.

A mileage log

If you claim mileage at HMRC's flat rate, keep a log of:

A notebook in the van, a spreadsheet or a mileage app all work. Recording it as you go is much easier than trying to piece it together in January.

Other records

• Any letters or notices from HMRC.
• Your UTR and CIS registration details.
• Records of payments on account and other tax payments.
• If you're VAT registered: your VAT records, which have their own rules.

How long to keep them

Keep records for at least 5 years after the 31 January online filing deadline for the tax year they relate to.

If you send a return late, or HMRC opens a check, you may need to keep them longer.

Paper or digital?

Either is fine for most people today. HMRC accepts clear photos or scans of receipts and statements instead of the originals, as long as nothing's missing and you can produce them if asked. Thermal-paper till receipts fade, so photographing them is a good idea anyway.

Making Tax Digital

If you come into Making Tax Digital for Income Tax — from April 2026 if your income was over £50,000, April 2027 if over £30,000 and April 2028 if over £20,000 — you must keep digital records of each item of income and expense in compatible software, and send quarterly updates from it. Starting a digital habit now makes that switch much easier.

A simple system that works

You don't need anything fancy. This takes a few minutes a week:

1. One folder per tax year — on your phone, in cloud storage, or a ring binder — with sub-folders for CIS statements, Invoices, Receipts and Bank.
2. Photograph every receipt the day you get it and drop it into that year's folder.
3. File each CIS statement as it arrives, and tick it off against your invoice. Does the deduction match 20% of the labour? See CIS deductions explained.
4. Log your mileage every day you use the van for work.
5. Once a month, add up your income, costs and CIS so far. A spreadsheet with one row per month is enough.

That monthly total also tells you roughly where you stand. Put it into the CIS refund calculator to see whether you're on track for a refund or a bill, and into the tax set-aside calculator to see how much to save.

Worked example: what a missing statement costs

Priya, a registered subcontractor, worked for four contractors in 2025/26. She filed her return using statements from three of them, totalling £5,200 of CIS. The fourth contractor deducted £900 over three months, but she never got the statements and didn't include it.

• CIS claimed: £5,200
• CIS actually paid: £6,100
• Refund she missed: £900

She can fix it by amending her return within 12 months of the 31 January deadline. But a statement in the folder at the time would have saved the hassle.

If HMRC checks your return

HMRC can open a compliance check into a return, normally within 12 months of the date it was filed. It will ask to see the records behind particular figures. If you've kept them, you send copies and that's usually the end of it. If you haven't, HMRC can disallow costs it can't verify, charge extra tax and interest, and charge a penalty of up to £3,000 for failing to keep adequate records (HMRC normally gives a warning first, unless the failure is serious).