CIS Gross Payment Status: How to Get It and Why It Matters

This guide covers gross payment status specifically. For how CIS works generally — registration, deductions, monthly returns — see our CIS subcontractor guide and CIS tax guide.

What is CIS gross payment status?

Under the Construction Industry Scheme (CIS), contractors normally deduct either 20% or 30% from payments to subcontractors and pass it to HMRC as a tax advance. This is designed to ensure subcontractors pay their tax — but it creates a significant cash flow problem.

Gross payment status is HMRC's way of saying: “We trust this subcontractor to pay their own tax.” Contractors pay you 100% of what's due, and you sort your own tax bill at the end of the year through Self Assessment. No deductions, no clawbacks, no waiting until January to get your money back.

The cash-flow difference: an example

Say you earn £5,000 on a CIS job.

Over a year earning £60,000 through CIS, that's the difference between receiving £48,000 and receiving £60,000 in-year. The tax bill is ultimately similar — but gross status means you're not waiting until January's rebate to get access to your own money.

Who qualifies?

HMRC applies three tests:

• Business test:You must be genuinely carrying out construction operations as defined by CIS. Working as an employee under PAYE doesn't count.
• Turnover test: Your net CIS turnover (excluding materials) must be at least £30,000 per year for sole traders, or £30,000 per company director for limited companies (up to a maximum of £100,000 total). Partnerships have their own thresholds.
• Compliance test:You must have been fully compliant with HMRC for the 12 months prior to applying — Self Assessment returns filed on time, tax paid on time, no outstanding debt. HMRC checks PAYE, National Insurance, Corporation Tax, and VAT if you're registered.

The compliance test is the main stumbling block. One late return in the past 12 months can be enough for HMRC to refuse your application. If you've had issues, get them sorted and wait until you have a clean 12-month record.

How to apply

You can apply online through your HMRC online account, or by phone on 0300 200 3210 (CIS helpline). You'll need:

• Your UTR (Unique Taxpayer Reference)
• Your National Insurance number
• Details of your construction turnover
• Your company registration number (if limited)

HMRC will check your compliance record. If everything passes, they'll send you a letter confirming gross payment status. This is usually processed within a few weeks. Notify your contractors once you have confirmation — they'll need to update their records to pay you in full.

What happens after approval

Once you have GPS, contractors verify you on the HMRC CIS online system before each job. The system shows your gross status and they pay you in full. You still need to complete your Self Assessment return each year and declare all your CIS income.

HMRC reviews gross payment status annually. As long as you stay compliant — returns on time, tax paid on time — it's renewed automatically. You don't need to reapply each year.

If you're refused

HMRC must tell you why they've refused. The most common reasons are a compliance failure in the past 12 months, or turnover below the threshold. You can appeal within 30 days of the refusal — if you believe the compliance check is wrong (e.g. a return that was actually filed on time), appeal immediately with evidence.

If HMRC revokes your GPS

HMRC can remove gross status at any time if you become non-compliant. They'll write to you first and give you an opportunity to correct things. If they proceed, contractors will be notified automatically via the CIS verification system and will start deducting 20% again from that date. You have the right to appeal.