CIS registration for subcontractors: how to register and what it changes

CIS registration tells HMRC you work as a subcontractor in construction, so contractors deduct 20% from your labour instead of 30%. You register online with your UTR, or as part of your Self Assessment registration if you are just starting out, and GOV.UK names no fee for doing it.

That is the whole of it for most trades. The decision that matters comes after: stay on 20%, or apply to be paid in full with gross payment status. This guide covers both, from GOV.UK's subcontractor pages, HMRC's CIS 340 guide and HMRC's own CIS manual, all read on 27 October 2026. It is general information, not tax advice for your business.

One thing worth knowing before you start. CIS only covers work you do for a contractor. A homeowner who hires you to fix their roof or fit their kitchen is not a contractor under the scheme, so nothing is deducted and you set the price. Trades who want more of that work need customers to be able to find them, which is what our websites for builders and construction firms are for.

Do you need to register for CIS?

You should register if you do construction work for a contractor and you are a sole trader, the owner of a limited company or a partner. Registering is not compulsory for subcontractors, but if you do not register, contractors must deduct 30% from your labour instead of 20%. Employees do not register.

A contractor here means a business that pays subcontractors for construction work: a builder, a developer, a labour agency or a gang leader. Most building work counts, including site preparation, demolition, alterations, repairs and decorating, and installing heating, lighting, power, water and ventilation. A few jobs are outside the scheme, among them carpet fitting, scaffolding hire with no labour, architecture and surveying, and delivering materials.

Two cases catch people out:

• Work for a homeowner. HMRC's CIS 340 guide says ordinary householders having work done on their own home are not contractors, so CIS does not apply.
• You are really an employee. CIS is for the self-employed. Whether you are self-employed depends on how you actually work, not on the label a contractor puts on it. GOV.UK has an employment status check if you are unsure.

Registered, unregistered or gross: which should you be?

For most subcontractors starting out, registered at 20% is the right answer. It takes one online form, and it cuts what contractors hold back from 30%. Gross payment status, where nothing is deducted, is worth applying for once you meet HMRC's turnover test and have a clean record of filing and paying on time.

	Unregistered	Registered (net payment status)	Gross payment status
Deducted from your labour	30%	20%	Nothing
What you need	Nothing	UTR and your business details	Pass the business, turnover and compliance tests
Turnover test	None	None	At least £30,000 a year as a sole trader, ignoring VAT and materials
When a sole trader's tax is settled	Self Assessment after the tax year ends	Self Assessment after the tax year ends	Self Assessment after the tax year ends, with nothing paid in advance
Who it suits	Nobody who can register	Most subcontractors, and anyone new	Established trades who keep money aside for tax

Whichever you are, the deduction is not your tax bill. It is an advance payment towards your income tax and National Insurance, and the real bill is worked out on your profit after the year ends. The difference between the two is the reason status matters: at 30% you lend HMRC more of your money for longer, and at gross you hold all of it and must find the tax yourself by 31 January.

How do you register for CIS?

Online, through GOV.UK. Which route you take depends on whether you already have a Unique Taxpayer Reference (UTR), the number HMRC gives you when you register for Self Assessment.

1. No UTR yet? Register as a new business for Self Assessment and choose "working as a subcontractor" when you are asked. GOV.UK says this registers you for Self Assessment and CIS at the same time.
2. Already have a UTR? Use the online CIS registration form on GOV.UK's "How to register" page. You sign in with your HMRC sign in details, or create them as you go.
3. Have these ready: your legal business name, and your trading name if it is different; your UTR; your VAT registration number if you are VAT registered; and the date you started trading. Depending on your setup you may also need your National Insurance number, a Company Registration Number, a registering partner's details or a joint venture agreement.
4. Wait for HMRC's letter. HMRC writes to confirm your registration and tells you what to give your contractors.

The online route registers you for "net payment status", GOV.UK's name for being paid with 20% deducted. If you cannot do it online, there are postal forms for sole traders (CIS301), partnerships and limited companies on GOV.UK's "How to register" page.

Three things to know:

• You cannot register over the phone. HMRC's CIS contact page says so in as many words. The helpline is for questions.
• You do not need to pay a firm. On 27 October 2026 one result on page one of Google sold CIS registration from £99. The GOV.UK form is the same registration, and GOV.UK names no fee for it.
• Do not guess at the details. GOV.UK warns that you could be fined for giving false information, and so could anyone who helps you.

If you also pay subcontractors yourself, you register as a contractor as well. That is a separate process, set up through HMRC's employer registration.

What do you give a contractor once you are registered?

Your UTR and your legal business or trading name, given exactly as you registered them. As a sole trader the contractor also needs your National Insurance number. They use these to verify you with HMRC before your first payment, and HMRC tells them whether to deduct 20%, 30% or nothing.

The match has to be exact. GOV.UK's contractor guide says the details used to verify you must exactly match the ones you registered with, and a temporary National Insurance number cannot be verified at all. If HMRC cannot match you, the contractor is told to deduct 30%, even though you are registered. So if you registered as "J Smith Plastering", do not give a contractor "John Smith".

Is there a CIS registration number? GOV.UK's subcontractor pages do not describe one. Your UTR is what identifies you. The number people often mean is the verification reference HMRC gives the contractor, which only appears on your statement when you were taxed at 30%. Keep it: you need it to claim credit for those deductions.

How do you check your CIS registration?

Look at your payment and deduction statements. Each one shows what the contractor paid you and what they deducted, so the rate tells you how HMRC verified you. If you think it is wrong, ring the CIS helpline on 0300 200 3210, Monday to Friday, 8am to 6pm. HMRC's contact page also says your business tax account holds information.

Verification is the contractor's side of the scheme: HMRC's online service is where a registered contractor verifies a subcontractor. If a contractor is deducting 30% and you have registered, check first that the name and UTR you gave them match your registration exactly. Before you call, make sure your personal details are up to date in your personal tax account: the helpline may ask security questions.

A contractor must give you a statement within 14 days of the end of each tax month in which they paid you. If one does not arrive, ask for it, and keep every statement. You need the totals for your tax return. Our CIS tax calculator lists what each statement must show.

What does a contractor deduct, and from what?

Only your labour. GOV.UK says contractors will not take CIS deductions from the VAT on your invoice, materials you paid for directly, consumable stores, plant hired for the job, or manufacturing and prefabricating materials. The contractor can ask for receipts for the materials, and if you have none, they will estimate the cost.

So keep labour and materials on separate lines of every quote and invoice, and keep the receipts. Say contractors pay you £30,000 for labour over a year. Registered, £6,000 of it is deducted; unregistered, 30% of it is. The CIS tax calculator works out the deduction on any single payment, including the materials and VAT, and shows what you will be paid.

The materials are still a business expense on your own return, alongside everything else on the self-employed expenses list. The deduction is not an expense: it is tax already paid, and it comes off your bill.

How do you get gross payment status?

You apply to HMRC and show that your business passes three tests. GOV.UK's online form also registers you for CIS if you have not registered yet, so you can do both in one go. HMRC looks back over the 12 months up to the date you apply.

The business test. Your business does construction work, or provides labour for it, in the UK, and it is run through a bank account.

The turnover test. Ignoring VAT and the cost of materials, your turnover for the last 12 months must be at least £30,000 as a sole trader. A company needs £30,000 for each director or £100,000 in all, and if 5 people or fewer control it, £30,000 for each of them. HMRC's manual adds a detail most guides miss: work you did direct for homeowners counts towards the turnover, even though it was outside CIS. Fuel for travelling and subsistence are not materials, so they do not come off the figure.

The compliance test. You have filed your returns and paid your tax and National Insurance on time over those 12 months. HMRC's manual (CISR46080, updated 25 March 2026) sets out what it will overlook:

• a Self Assessment return sent no more than 28 days after the deadline;
• any late payment of CIS, PAYE or VAT under £100;
• up to three late payments of £100 or more, each up to 14 days late, for each of those taxes.

It will not overlook any late National Insurance, a Self Assessment return more than 28 days late, or a return due in the period that is still outstanding when you apply. If you also pay subcontractors or are VAT registered, those returns and payments count too.

What the form asks for. As a sole trader: your National Insurance number, UTR, VAT number if you have one, turnover for the last 12 months, evidence of it such as bank statements, payment and deduction statements and invoices, your bank details and a PAYE reference if you have one. There is a postal form, CIS302, if you cannot apply online. If you are new and HMRC has no tax history for you, its manual says it will ask for evidence of the turnover you claim.

Can you lose gross payment status?

Yes. HMRC reviews gross payment status every year, and you must stay on time with your returns and payments to keep it. If you are about to fail, HMRC writes with the reasons and you can reply with yours. If it does not accept them, it withdraws the status in 90 days, and you have 30 days from that letter to appeal.

After a cancellation you must wait a year before you can apply again. In the meantime contractors deduct 20%, so losing the status takes 20% of your labour out of every payment, while your tax bill for the year stays the same. If you are struggling to pay HMRC on time, contact HMRC before the deadline: GOV.UK says that if HMRC gives you more time to pay, it will not affect your gross payment status.

Is gross payment status worth it?

It is worth it if you are disciplined about tax. With gross status you are paid in full and pay all your tax and National Insurance at the end of the year, so the cash flow is better but nothing is put aside for you. Under 20% deductions, part of the bill is paid as you go, and subcontractors are often due money back.

Before you apply, ask yourself three things:

1. Would you have the tax in the bank by 31 January? If the deductions are the only reason you have never had a large bill, gross status changes that.
2. Is your filing record clean? One Self Assessment return more than 28 days late in the last 12 months fails the test.
3. Do your contractors pay on time? Gross status protects your cash flow only if the money arrives. If one is slow, our guide to a customer refusing to pay sets out the steps.

The self-employed tax calculator shows what a year's bill looks like on your profit, which is the sum to keep aside on gross status.

Do you get the deductions back at the end of the year?

Often, in part. The deductions count towards your tax and National Insurance for the year, and HMRC repays anything taken beyond what you owe. As a sole trader you enter your total pay before deductions as income, and the total deducted as CIS deductions, on your Self Assessment return.

You get more back the more genuine expenses you claim, because your real bill is worked out on profit, after your expenses and your Personal Allowance. The CIS tax rebate calculator estimates the figure from your statements and expenses. If you still owe tax after the deductions, you pay it by 31 January after the tax year ends.

What changes if you go limited or change your business?

You usually have to register again. GOV.UK says you cannot transfer a CIS registration from your old business structure, so moving from sole trader to limited company, or into or out of a partnership, means a new registration, and gross payment status has to be applied for again. Report the change to the CIS helpline.

A limited company registers with its Company Registration Number and its own UTR, and it takes its deductions back through the payroll, not the Corporation Tax return. GOV.UK warns you may get a penalty if you use the Corporation Tax return instead. Our guide to sole trader or limited company shows what that means for a one-person company's cash flow.

You must also tell HMRC if you change your trading name or your business, private or registered office address, or if you stop trading. A company with gross payment status must tell HMRC within 30 days of adding new shareholders, or it may lose the status.