How to Register for CIS: Subcontractor & Contractor Guide

Registering for the Construction Industry Scheme isn't optional if you work in UK construction. Contractors must register before they take on subcontractors. Subcontractors don't strictly have to register — but if they don't, contractors deduct 30% from their labour instead of 20%, so it pays to.

Here's how registration works on both sides, what you'll need, and how the deduction rate (and gross payment status) follows from it.

Who Needs to Register

There are two roles under CIS, and you might be one or both:

• Contractor — you pay subcontractors for construction work. You must register as a contractor before your first payment to a subcontractor. As a contractor you verify subcontractors, deduct CIS, file monthly CIS returns, and pay the deductions to HMRC.
• Subcontractor — you do construction work for a contractor and get paid for it. You should register so contractors deduct 20% rather than 30% on your labour.

Some businesses are both: they take on subcontractors AND work as subcontractors for larger firms. If that's you, register for both.

Registering as a Subcontractor

According to HMRC, "the quickest way to register is online." You can register for payment under deduction (the standard route) or, if you qualify, apply for gross payment status (more on that below).

You'll need:

• Your legal business name (and trading name, if different)
• Your Unique Taxpayer Reference (UTR) for the business
• Your VAT registration number, if you're VAT-registered
• The date you started trading
• Your National Insurance number (sole traders), or Company Registration Number and director/partner details (companies and partnerships)

If you don't already have a UTR, you'll need to register for Self Assessment first to get one, then register for CIS.

Subcontractor Deduction Rates

Once registered and verified, your deduction rate is set by your status:

Status	Rate on labour	Notes
Registered	20%	The standard rate for verified, registered subcontractors
Unregistered	30%	Applies until you register and are verified
Gross payment status	0%	Paid in full; you settle tax and NI at year end

The deduction always applies to the labour portion only — not materials, plant hire, or VAT. Use the CIS Deduction Calculator to see exactly what comes off a given payment at each rate, and our subcontractor invoice template guide for how to lay it out on an invoice.

Registering as a Contractor

If you pay subcontractors, you register as a CIS contractor — this is done through HMRC as an employer/contractor registration. Once registered, you must:

1. Verify each subcontractor with HMRC before their first payment — this confirms their 20% or 30% rate
2. Deduct CIS from the labour portion of each payment at the verified rate
3. Issue each subcontractor a payment and deduction statement within 14 days of the tax month end
4. File a monthly CIS return by the 19th — including a nil return in months you pay nobody
5. Pay the deductions to HMRC

The contractor obligations are ongoing and carry their own penalties for late returns. Our guide on filing your monthly CIS return covers the deadline and the penalty schedule in detail.

Gross Payment Status

Gross payment status means contractors pay you in full with no CIS deductions — you "pay all your tax and National Insurance at the end of the tax year" instead. It's worth applying for once your business is established, because it removes the cash-flow drag of deductions throughout the year.

To qualify, HMRC applies three tests:

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

2. The turnover test. Over the preceding 12 months, your turnover (excluding VAT and the cost of materials) must be at least:

• £30,000 if you're a sole trader
• £30,000 for each partner in a partnership, or at least £100,000 for the whole partnership
• £30,000 for each director of a company, or at least £100,000 for the whole company

3. The compliance test. You've paid your tax and National Insurance on time in the past.

HMRC reviews gross payment status regularly. Fall behind on returns or payments and you can lose it — so the discipline of filing returns and paying on time isn't just about avoiding penalties, it protects your gross status too.

After You Register

Registration is the start, not the end. Subcontractors need clean invoices with the labour/materials split and UTR so contractors deduct correctly. Contractors need a reliable monthly rhythm of verifying, deducting, issuing statements, and filing returns.

The VAT side adds another layer: if you're VAT-registered and the work is CIS-reportable, the domestic reverse charge for construction usually applies, changing how VAT appears on your invoices. It's worth understanding alongside CIS because the two interact on most VAT-registered construction jobs.

For the complete picture on how CIS works — deductions, returns, statements, and the April changes — see our CIS payments guide.

This is general guidance on CIS registration, not tax advice. Registration requirements and thresholds have specific conditions — consult a qualified accountant or HMRC for your circumstances.

Sources

• How to register as a CIS subcontractor — GOV.UK
• CIS gross payment status — GOV.UK
• What you must do as a CIS contractor — GOV.UK