HMRC letters • Plain English

CIS verification letter or reference from a contractor

Before paying a new subcontractor, a contractor must check with HMRC what rate to deduct: gross, standard (20%) or higher (30%). If HMRC cannot match your details, you are treated as "unmatched" and the contractor deducts at the higher rate until you are registered or the details are corrected. The contractor gets a verification reference, and an unmatched one ends in a letter.

By The HandySums teamLast checked:

Who gets this

CIS subcontractors whose contractor says they could not verify them.

How to recognise it

  • Your contractor gives you a reference starting with V, with a letter added at the end if you could not be matched.
  • You see deductions at 30% on your statements.
  • HMRC sends the contractor a notice of the change (called CIS316B in HMRC's manual) once you are registered or matched.

What to do

  1. Check that your name, UTR and National Insurance number match exactly what you registered with HMRC.
  2. If you are not registered, register for CIS.
  3. Ask the contractor to re-verify you. They must use the exact details you registered with.
  4. Keep every statement showing 30%: the extra deduction can be claimed back.

By when

As soon as you see a 30% deduction. Each month at 30% costs you tax you may not need to pay.

What happens if you ignore it

  • The contractor keeps deducting 30% from every payment.
  • You will not get the money back until you file your return.

Official GOV.UK pages

Not sure it is genuine?

Do not use any link or phone number printed in a message you are unsure about. Check the list of genuine HMRC letters, then find HMRC’s contact details on GOV.UK yourself. You never need to upload your letter to HandySums, and we would never ask.

CalculatorCIS tax and refund calculatorCheck the CIS that should have been taken, spot deductions on materials, and estimate your refund or bill.CalculatorEstimate your refund from monthly statementsEnter each monthly CIS statement and see your total labour, deductions and materials, a likely refund, and which tax years you can still claim.GuideCIS deductions explained20%, 30% or nothing — what CIS is taken on, what it isn't, and how to check your statements.

Sources and review

Last checked: 1 November 2026. What this letter is, the deadlines and the penalties described on this page. Written and checked by the HandySums team against the GOV.UK pages below. HandySums is independent and not an accountancy firm — see how we check our sums.

A guide, not tax advice. Results and explanations are a guide and HMRC has the final say. Always follow the dates and instructions on your own letter, and check with HMRC or a qualified accountant if unsure.