If you work as a CIS subcontractor, keeping good records is essential for filing accurate Self Assessment returns, reclaiming overpaid CIS, and avoiding problems if HMRC checks your tax affairs. Your records are the foundation of everything — from proving what you earned to supporting the expenses you claim.

This guide covers what records CIS subcontractors need to keep, how long to store them, and practical ways to stay organised throughout the tax year.

What Records CIS Subcontractors Need to Keep

CIS subcontractors need to keep CIS payment statements, copies of invoices sent, expense receipts, and bank records for at least five years after the relevant Self Assessment filing deadline.

Beyond that minimum, your records need to show your income, your expenses, and the CIS deductions taken from your payments. HMRC doesn't prescribe a specific format, but your records need to be accurate and accessible.

CIS Payment Statements

Your most important CIS-specific records are the payment statements your contractors provide. Each statement shows:

Gross payment amount
Cost of materials deducted
Amount subject to CIS deduction
CIS deduction taken (20% or 30%)
Net payment you received
Verification reference number

It's important to keep every statement. You need these to complete the CIS section of your Self Assessment return and to prove how much tax has already been deducted on your behalf. If your figures don't match what HMRC has on file (from your contractor's returns), it can delay your CIS refund.

Invoices You've Sent

Keep copies of every invoice you send to contractors. These should show:

Your name, UTR, and contact details
The contractor's name and address
Invoice date and number
Description of work completed
Labour charge (listed separately)
Materials supplied (itemised with costs)
Total amount

Your invoices are your primary income record. They should match the gross amounts on your CIS payment statements.

Expense Records

Keep records of all allowable business expenses you intend to claim. For each expense, record:

Date of purchase or payment
Amount paid
What it was for and why it's a business expense
Category (tools, travel, clothing, insurance, etc.)

What to keep:

Receipts from suppliers and shops
Bank and credit card statements showing business purchases
Mileage logs for travel to and from construction sites
Invoices from service providers (accountants, insurance companies)
Records of phone and internet costs if you claim a proportion

Bank Records

Business bank statements (every month)
Personal bank statements if you use a personal account for business
Records of cash payments received (with dates and contractor details)

If you use a separate business bank account, tracking becomes much simpler — every transaction is business-related by default.

How Long to Keep CIS Records

The general rule is the same as for all self-employed records: keep everything for at least 5 years after the 31 January filing deadline for the relevant tax year.

Tax year	Filing deadline	Keep records until
2024/25	31 January 2026	31 January 2031
2025/26	31 January 2027	31 January 2032
2026/27	31 January 2028	31 January 2033

If you file your return late, keep records for 15 months after the date you actually submitted.

In practice, keeping records for 6 years covers most situations comfortably. For more detail, see our guide on how long to keep tax records.

Digital vs Paper Records for CIS Subcontractors

HMRC accepts both digital and paper records, though digital records are becoming increasingly important — particularly with Making Tax Digital.

Paper Records

Store in labelled folders by tax year
Keep originals where possible (receipts fade over time)
Protect from damage

Digital Records

Photograph or scan receipts on the day you receive them
Use cloud storage (Google Drive, Dropbox, iCloud) for automatic backup
Organise by tax year and category
Consider accounting software that connects to HMRC for MTD

Tip: Many subcontractors photograph receipts immediately with their phone and file the originals in a box until the end of the tax year. This gives you a searchable digital backup and a physical fallback.

MTD and Digital Record Keeping

From April 2026, Making Tax Digital for Income Tax applies to those with qualifying income over £50,000 (2026/27). If you're above this threshold, HMRC requires you to keep digital records in MTD-compatible software and submit quarterly updates.

Even if you're below the threshold, keeping digital records now makes the transition easier when the threshold drops to £30,000 in April 2027.

Organising CIS Subcontractor Records Month by Month

A simple monthly routine prevents the January scramble. Here's a practical approach:

Weekly (5 minutes)

Photograph any paper receipts
Log mileage if you travelled to a new site

Monthly (15 minutes)

Check your CIS payment statement against your invoice for that contractor
File the statement (digitally or physically)
Review bank statements and categorise any business transactions
Note any discrepancies to follow up with your contractor

Year-End (1-2 hours)

Add up total income from all CIS payment statements
Add up total CIS deductions
Compile total expenses by category
Reconcile against bank statements
Gather everything you need for Self Assessment

Penalties for Poor CIS Record Keeping

HMRC can charge penalties if your records are inadequate and this leads to inaccuracies on your tax return. The penalties depend on the circumstances:

Careless errors caused by poor records: up to 30% of the tax underpaid
Deliberate errors: up to 70% of the tax underpaid
Failure to keep records: up to £3,000 per tax year (2025/26)

Beyond penalties, poor records make it harder to claim all your expenses and can lead to smaller CIS refunds. If you can't prove an expense, you can't claim it.

If a contractor goes out of business and you don't have your payment statements, contact HMRC's PT Operations team. They hold records of CIS deductions submitted by contractors and can confirm what was deducted from your payments.

Frequently Asked Questions About CIS Record Keeping

What's the most important record for a CIS subcontractor to keep?

Your CIS payment statements. These are the proof that tax has already been deducted from your income. Without them, you can't accurately complete the CIS section of your Self Assessment return, and your refund may be delayed or reduced.

Do I need accounting software as a CIS subcontractor?

Not necessarily. A spreadsheet and organised folder of receipts and statements is sufficient for many subcontractors. However, if your qualifying income exceeds £50,000 (2026/27), MTD requires you to use compatible software. Even below that threshold, software can save time and reduce errors.

Can I use my personal bank account for CIS payments?

Yes, but it's not ideal. Using a personal account means you need to identify which transactions are business-related and which are personal. A dedicated business account — even a free one — makes record keeping significantly easier and reduces the risk of missing expenses or misreporting income.

What if I've lost a CIS payment statement?

Ask your contractor for a replacement. If the contractor has ceased trading, contact HMRC's PT Operations team — they hold records of all CIS returns submitted by contractors and can confirm the deductions made from your payments. Keep any correspondence as part of your records.

This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently. Always verify current requirements on GOV.UK or consult a qualified accountant for your specific situation.

Official Sources

What you must do as a CIS subcontractor - GOV.UK
Keeping your pay and tax records - GOV.UK
CIS: a guide for contractors and subcontractors (CIS 340) - GOV.UK
Check your CIS payments and deductions - GOV.UK

Keeping Records as a CIS Subcontractor: What HMRC Expects

Key Actions