Gross Payment Status CIS — How to Apply and What You Need to Qualify

Most subcontractors in construction have 20% deducted from their labour payments and paid to HMRC by the contractor. That money comes back when you file your Self Assessment — but in the meantime it's sitting with HMRC rather than in your account.

Gross Payment Status (GPS) means no deduction at all. You receive your full invoice amount. For a subcontractor turning over £100,000 in labour, that's potentially £20,000 in cash flow that stays in your bank rather than with HMRC until January.

Here's what you need to qualify and how to apply.

What is Gross Payment Status?

Gross Payment Status is granted by HMRC to CIS subcontractors who meet certain criteria. When a contractor verifies a GPS subcontractor, the system confirms that no deduction should be made. The contractor pays the full invoice amount and you deal with your tax liability through Self Assessment in the normal way.

Who qualifies?

HMRC apply three tests to GPS applications:

The business test You must be carrying on a business in the UK in the construction industry. This is broadly satisfied by anyone who is legitimately self-employed as a subcontractor.
The turnover test For sole traders, your net turnover from construction work in the last 12 months (or expected turnover in the next 12 months) must be at least £30,000.

Note: this is net turnover — excluding the cost of materials. It's based on your labour income. So if you turn over £45,000 but £15,000 of that is materials, your net is £30,000 and you meet the threshold.

The compliance test This is the one that catches people. You must have a clean compliance record for the previous 12 months:

All Self Assessment returns filed on time All tax and NI paid on time Any VAT returns filed and paid on time (if VAT registered) Any PAYE submissions made on time (if you employ anyone)

HMRC look at the last 12 months. If you have late filings or payments in that period, you may not qualify. If you've been on time with everything, you likely will.

How to apply Apply through your Government Gateway account under the CIS section, or by calling the CIS helpline on 0300 200 3210.

You'll need: Your UTR number Your business turnover figures Your trading name and address

HMRC will review your application against the three tests. They may contact you for additional information. A decision is usually made within a few weeks.

Once granted, GPS applies immediately. When contractors verify you, the system confirms your GPS status and they pay you in full.

How long does GPS last? HMRC review GPS status annually. If you maintain your compliance record, it renews automatically. If you slip — a late filing, a missed payment — HMRC can remove GPS and you drop back to 20% deductions. In serious cases, they can act within 12 months of the grant.

The golden rule of GPS: once you have it, never be late with HMRC again. File everything on time, pay everything on time. The cash flow benefit is too valuable to risk over a missed deadline.

What if you're refused?

If HMRC refuse your GPS application, they'll tell you why. Common reasons:

A late filing in the 12-month window An outstanding tax debt Turnover below the threshold

If the issue is a one-off late filing from 11 months ago, wait until it's outside the 12-month window and reapply. If the issue is compliance, get it sorted and apply once you've built a clean record.

Is it worth applying?

For most subcontractors with £30,000+ in labour turnover and a clean HMRC record, yes — clearly. The cash flow improvement is immediate and real. For someone who regularly files late or has had payment issues, getting the compliance sorted first is the priority.

GPS is one of those things that rewards the tradespeople who run their business properly. Good records, on-time filings, no outstanding debts — the same habits that make everything else easier.