With gross payment status, contractors pay you in full and take nothing off for tax. You then declare the payments as income on your Self Assessment return, if you are a sole trader or partner, or your Corporation Tax return, if you own a limited company, and pay your tax and National Insurance at the end of the tax year. Without it, contractors deduct tax from your payments as an advance towards the same bill. So gross payment status changes when you pay, not how much.
Who can apply
You can apply as a sole trader, as a partnership or as a limited company, if you work as a subcontractor on construction work in the UK. Applying also registers you for the Construction Industry Scheme if you have not already registered. An employee does not register.
HMRC grants gross payment status only if your business passes three tests, set out below.
What to have ready
You need your Unique Taxpayer Reference, details of your bank account and your turnover for the last 12 months, with evidence such as bank statements, payment and deduction statements, invoices and contracts. HMRC then asks for details that depend on how you trade.
| If you are | Post this form | HMRC also asks for |
|---|---|---|
| A sole trader | CIS302 | Your National Insurance number, and your VAT and PAYE references if you have them |
| A partnership | CIS304 | The name, address, UTR and National Insurance number of each partner, and the VAT and PAYE references if the partnership has them |
| A limited company | CIS305 | The name, address, UTR and National Insurance number of each director and person with significant control, and the company registration, VAT and PAYE references if it has them |
Apply
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Check you pass the three tests
HMRC checks the 12 months before the date you apply. If you are short on turnover, or have more late returns or payments than the tolerances allow, wait until the 12 months before your application would pass.
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Gather your details and evidence
Collect what the table above lists for your type of business. The online version of the form cannot be saved part-way, so have it all to hand before you start.
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Apply online or by post
Sign in with your Government Gateway user ID and fill in the online form for your type of business. If you cannot apply online, fill in the form for your business, print it and post it to HMRC. You could be fined for giving false information, and so could anyone who helps you make a false registration.
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Give contractors the exact details you registered with
When HMRC grants the status, give each contractor your UTR and your legal business or trading name exactly as you registered them. Contractors use them to verify you, and if they cannot, they may deduct tax at the higher rate.
After you apply
If HMRC refuses your application, you can appeal. You must give HMRC notice of the appeal within 30 days of the refusal, with your reasons for believing it should not have been refused.
If you later change your business structure, for example from sole trader to limited company, you cannot transfer the registration. You must register for the scheme again and apply again for gross payment status.
HMRC reviews your status every year, and can take it away if you stop passing the tests.
Legal basis
Primary legislation and key regulations
Official guidance
What you must do as a CIS subcontractor (opens in a new tab)
GOV.UK
Apply for CIS gross payment status online (opens in a new tab)
GOV.UK
Register a partnership as a subcontractor or apply for gross payment status (opens in a new tab)
HMRC
Register as a sole trader subcontractor or apply for gross payment status (opens in a new tab)
HMRC
Register a limited company as a subcontractor or apply for gross payment status (opens in a new tab)
HMRC