Gross Payment Status
HMRC status that allows a CIS subcontractor to be paid in full with no tax deduction. To qualify, the subcontractor must pass three tests: business (UK construction operations run from a UK bank account), turnover (£30,000 per sole trader/partner/director, or £100,000 aggregate for partnerships and companies), and compliance (filed all returns and paid all tax on time in the previous 12 months). The status is reviewed annually and can be withdrawn for non-compliance.
Related Terms
CIS
Acronym for Construction Industry Scheme — the HMRC regime under which contractors deduct tax from payments to construction subcontractors at 20% (registered) or 30% (unregistered), with the labour element only, and subbies reconcile via Self Assessment.
Construction Industry Scheme
HMRC scheme requiring contractors to deduct tax (20% for registered subcontractors, 30% for unregistered) from payments to subcontractors for construction work.
Self Assessment
The system by which individuals report their own income, gains, and reliefs to HMRC each year through an online or paper tax return, rather than having tax collected automatically under PAYE.
Try the calculator
Use our free tool to see how gross payment status affects your tax.