CIS gross payment status (UK): eligibility, checklist, and how to apply (2026)

The Reality: If you’re on 20% CIS deductions, HMRC can sit on five figures of your money for months. Gross payment status is how you stop the drip: contractors pay you 100%, and you manage tax payments yourself.

This is not tax advice. If you’re VAT registered, work on self-billing, or you’re unsure what counts toward the turnover test, confirm with your accountant.

If you need the full CIS basics first, start here: Complete CIS Tax Guide for Subcontractors 2026.

CIS gross payment status (UK) — the practical 2026 guide

What gross payment status actually does (and doesn’t do)

What it does: contractors apply 0% CIS deduction when they pay you.
What it doesn’t do: reduce your actual tax bill. You still owe tax via self-assessment (or corporation tax if limited) — you just keep the cash until you pay.

Who should bother applying

Apply if:

• You’re regularly invoicing contractors (not homeowners) and CIS deductions are consistently hitting cash flow.
• You already run your admin like a grown-up (on-time filings, clean records).
• You’re over the turnover threshold and plan to stay there.

Don’t apply yet if you’re behind on filings or you’re not confident you can stay compliant. Fix compliance first, then apply — otherwise you’ll get rejected or removed later.

The three HMRC tests (the checklist)

You must pass all three.

1) Turnover test (the one everyone quotes)

Construction turnover in the last 12 months must be at least £30,000.

Practical tip: keep a simple exportable ledger of CIS work invoices so you can prove the number quickly.

2) Compliance test (the one that removes people)

You must have:

• Filed required returns on time (self-assessment, CIS returns if you’re a contractor, PAYE if you have employees, VAT if registered).
• No serious outstanding tax debt (HMRC can remove gross status if they think you’re not compliant).

If you pay subcontractors (meaning you’re also a contractor), keep this handy: CIS monthly return deadlines and penalties (2025).

3) Business test (prove you’re real)

HMRC wants to see you’re a genuine construction business, typically evidenced by:

• Public liability insurance
• A business bank account
• Relevant qualifications or experience
• UK-based operations

How to apply (simple steps)

1. Log in to HMRC Government Gateway.
2. Go to CIS and choose the option to apply for gross payment status.
3. Prepare proof before you click submit:
   • Last 12 months CIS turnover evidence (invoice list, bank receipts)
   • UTR (and Companies House number if limited)
   • Insurance policy details
   • Qualification proof (where applicable)
4. Submit and track the decision.

Processing time varies; if HMRC asks for evidence, respond fast.

The “don’t get removed” operating system

Gross status is worth it only if you keep it. Your operating system:

Never miss deadlines

• Put reminders for every filing deadline (self-assessment, VAT, CIS, PAYE).
• If you use an accountant, confirm who owns each deadline.

Keep invoices CIS-clean

When contractors can’t verify you cleanly, payment slows down. Use a consistent invoice format with UTR and a labour/material split: CIS invoice template (UK) for subcontractors.

Keep an evidence pack

Store:

• CIS deduction statements (when applicable)
• Invoices you issued
• Proof of materials costs (where relevant)
• Insurance certificates

If you’re missing statements or want a clean reconciliation workflow, use: CIS deduction statement explained + template.

If you want a printable attachment to reduce disputes, use: Job sheet and work order template for trades.

Common reasons people lose gross payment status

• Late self-assessment filing (classic)
• Late VAT return (if registered)
• Late CIS returns (if you pay subcontractors)
• Unresolved HMRC letters / queries
• Sloppy records that make turnover/compliance hard to prove

Where Toolfy fits

If you’re aiming for gross status, the fastest way to stay eligible is to make records boring: consistent invoices, attached evidence, and quick exports for your accountant. Toolfy is built for UK VAT/CIS workflows so you can keep this tidy without spreadsheets. Start a free trial if you want to set it up quickly.