How to Check Your CIS Deductions Under MTD for Income Tax

If you're a CIS subcontractor, the tax your contractors deduct is money you've already paid toward your bill — so it's worth checking the figures are right before you finalise your year. Here's how to do it under Making Tax Digital (MTD) for Income Tax.

Why checking matters

Under CIS, your contractor deducts tax (usually 20%) from your labour and pays it to HMRC, then reports it on a monthly CIS return. That reported total is what HMRC credits against your final tax bill. If a contractor:

• forgot to file,
• reported the wrong amount, or
• used the wrong deduction rate,

then the figure HMRC holds won't match what was actually taken off you — and you could end up over- or under-credited. Checking protects your refund.

Where the numbers come from

There are two sources of truth you're comparing:

1. Your contractor statements. By law, each contractor must give you a payment and deduction statement showing gross pay, materials, and CIS deducted. Keep every one.
2. HMRC's reported figure. This is built from the monthly CIS returns your contractors file against your UTR. MTD software can retrieve this "CIS deductions for a subcontractor" total straight from HMRC.

Step by step

1. Gather your statements for the whole tax year, contractor by contractor.
2. Retrieve HMRC's figure in your MTD software's CIS deductions view.
3. Reconcile — add up your statements and compare to HMRC's total. Flag any contractor that's missing or doesn't match.
4. Keep filing your quarterly updates as normal; CIS isn't part of them.
5. Fix discrepancies before the final declaration — after Q4 and before you finalise, submit your own correct CIS figure if needed, with the statement as evidence.

A worked example

Say you invoiced £40,000 of labour across the year and you're CIS-registered, so 20% was deducted:

• CIS deducted by contractors: £8,000
• Your allowable expenses (tools, van, insurance, etc.): £9,000
• Taxable profit: £40,000 − £9,000 = £31,000

Your tax and National Insurance on £31,000 will very often be less than the £8,000 already deducted — which is why so many subbies are due a refund. That's exactly why the CIS figure needs to be accurate: it's the credit that produces your repayment.

Keep filing quarterly updates on your income and expenses. The CIS deductions are viewed separately and set against the final bill — a wrong CIS total directly changes your refund.

Doing it in ThisQuarter

ThisQuarter includes a dedicated, read-only CIS deductions view per client: it retrieves the deductions contractors have reported to HMRC for the tax year so you (or your accountant) can reconcile them against your statements in one place, and clearly flags where a correction may be needed before the final declaration.

This article is general information, not tax advice. Check your own obligations at gov.uk.