How do I apply for CIS gross payment status in the UK?

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What Is CIS Gross Payment Status Under the Construction Industry Scheme (CIS), contractors deduct 20% tax (or 30% for unregistered subcontractors) from payments before passing them to subcontractors. Gross payment status (GPS) allows a subcontractor to receive the full payment without deduction, managing their own tax through Self Assessment. This improves cash flow significantly. Eligibility Tests To qualify, you must satisfy three tests: 1. Business test: you must carry on a construction business in the UK through a bank account, and the work must genuinely be within the CIS scope. 2. Turnover test: net CIS turnover (excluding materials and VAT) in the past 12 months must be at least: - GBP 30,000 for a sole trader - GBP 30,000 per director/partner, up to a maximum of GBP 200,000 for companies or partnerships 3. Compliance test: you must be up to date with all HMRC obligations -- tax returns filed, tax paid on time, PAYE and NI up to date. Even minor historic compliance failures can cause HMRC to refuse or revoke GPS. How to Apply Log in to your HMRC online business tax account and navigate to the CIS section. From there you can apply for gross payment status. Newly registered businesses can apply at the point of CIS registration. HMRC targets a 28-day turnaround for applications. You will need: - Your Unique Taxpayer Reference (UTR) - Business bank account details - Details of your construction turnover Annual Review HMRC reviews GPS holders automatically each year. If your compliance slips -- for example, a late self-assessment return or a missed payment -- HMRC can remove GPS and you revert to the 20% deduction rate. You will receive a 90-day warning notice before removal except in cases of fraud. After Removal If GPS is removed, you cannot reapply for 12 months. It is therefore critical to maintain impeccable compliance: file returns on time, pay all tax and NI by the due date, and keep PAYE up to date if you employ staff. Practical Note Some larger contractors require GPS before awarding significant contracts. Securing and maintaining GPS is a competitive advantage in the construction sector.

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