How to Register for CIS: Contractors & Subcontractors (2026)
Registering for the Construction Industry Scheme (CIS) correctly can be the difference between a subcontractor losing 30% of their pay to tax deductions or only 20% u2014 and for contractors, it’s a legal requirement, not a choice. This guide from Filing Accounts UK explains exactly how to register as both a contractor and a subcontractor, using only verified facts from official HMRC guidance.
At Filing Accounts, we help construction businesses register for CIS and stay compliant. Official guidance is available at GOV.UK: How to register as a CIS subcontractor. For how VAT interacts with CIS, see our VAT for CIS guide.
What Is CIS?
The Construction Industry Scheme is HMRC’s system for collecting Income Tax from self-employed people working in construction. Contractors deduct money from subcontractor payments and send it to HMRC as an advance payment toward the subcontractor’s eventual tax bill u2014 similar in principle to how PAYE works for employees, but for self-employed subcontractors.
CIS Deduction Rates
| Status | Deduction Rate |
|---|---|
| Gross payment status | 0% |
| Registered subcontractor | 20% |
| Unregistered / unverified subcontractor | 30% |
Deductions are advance payments of tax, not a final bill u2014 any excess is refunded once you file your tax return. But the difference between 20% and 30% has a real, immediate cash flow impact, which is why registering is almost always worthwhile even though it isn’t legally compulsory for subcontractors.
Who Must Register?
- Contractors — mandatory. You must register if you pay subcontractors for construction work, or if you’re not a construction business but have spent more than £3 million on construction in the past 12 months.
- Subcontractors — not legally required, but almost always worthwhile, since unregistered subcontractors face 30% deductions instead of 20%.
- If you both hire subcontractors and do subcontracted work yourself, you must register as both.
How to Register as a Subcontractor
Step 1: Get a UTR First
You need a Unique Taxpayer Reference before you can register for CIS. If you don’t have one, register for Self Assessment and select “working as a subcontractor” during that process u2014 this registers you for Self Assessment and CIS simultaneously. There’s no separate “CIS number” u2014 your UTR itself acts as your CIS reference.
Step 2: Register Online (or by Phone)
If you already have a UTR, register via your HMRC online account (Government Gateway), or call the CIS helpline on 0300 200 3210. This registers you for “net payment status,” meaning contractors will deduct 20% by default.
You’ll need your UTR, National Insurance number, and business details. Limited companies also need their company UTR and Company Registration Number.
How to Register as a Contractor
- Register online through your HMRC business account, or by calling HMRC
- Verify every subcontractor with HMRC before making their first payment — this tells you whether to deduct 0%, 20%, or 30%
- File a monthly CIS return reporting payments and deductions — even a “NIL return” is required in months where no subcontractors were paid
- Provide each subcontractor a payment and deduction statement for every payment made
If a subcontractor’s details don’t exactly match HMRC’s records during verification — even a minor name discrepancy — they can come back as “unmatched,” triggering the 30% rate even if they’re genuinely registered. Always double-check details carefully.
Gross Payment Status: Getting 0% Deductions
Once registered, subcontractors can apply for gross payment status, meaning contractors pay the full invoice with no deduction at all, and tax is settled entirely through Self Assessment or Corporation Tax at year end. To qualify, HMRC applies three tests:
- Business test: you run a genuine UK construction business
- Turnover test: construction turnover (excluding materials and VAT) of at least £30,000 in the past 12 months for a sole trader — different thresholds apply for partnerships and companies
- Compliance test: your tax and filing record must be clean — HMRC allows a small tolerance (up to three late payments under £100 each, or one Self Assessment payment up to 28 days late) before an application is refused
Apply using form CIS302 (sole traders), CIS304 (partnerships), or CIS305 (limited companies). Gross payment status is reviewed annually, and from 6 April 2026, HMRC has stronger powers to remove it immediately where it believes a business knew, or should have known, it was part of a fraudulent supply chain.
Common Mistakes to Avoid
Starting Work Before Registering
This guarantees the 30% deduction rate from your very first payment, which you’ll then have to wait to reclaim.
Assuming CIS Registration Replaces Your Tax Return
CIS registration doesn’t remove your obligation to file Self Assessment (or Corporation Tax) — it simply sets the correct deduction rate along the way.
Contractors Skipping Verification
Failing to verify a subcontractor before the first payment, or applying the wrong rate, is a compliance failure that sits with the contractor, not the subcontractor.
Missing Monthly CIS Returns
Contractors must file every month, including NIL returns, even in months with no subcontractor payments.
Frequently Asked Questions
Do subcontractors have to register for CIS?
No, it’s not legally required, but unregistered subcontractors face 30% deductions instead of 20%, so registering is almost always worthwhile.
What’s the difference between my UTR and a CIS number?
There isn’t a separate CIS number — your UTR serves as your CIS registration reference.
How long does CIS registration take?
If you already have a UTR, registration is usually effective immediately. If you need a UTR first, allow at least 10 working days for it to arrive.
Can a limited company register for CIS?
Yes. Sole traders, partnerships, and limited companies can all register as CIS subcontractors or contractors.
Need Help Registering for CIS? Talk to Filing Accounts UK
At Filing Accounts, we help contractors and subcontractors register correctly, apply for gross payment status where eligible, and keep monthly CIS returns on track.
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