On time, in the past
You have paid your tax and National Insurance on time in the past, your business does construction work, or provides labour for it, in the UK, and it is run through a bank account.
CIS gross payment status
Gross payment status: paid in full, with nothing taken off.
With gross payment status, contractors pay you in full with no CIS deductions, and you pay all your tax and National Insurance at the end of the tax year. HMRC grants it to a business that passes its tests, and reviews it every year. Here is what it looks at.
To qualify
Your record, your work, and your turnover.
The turnover test
HMRC looks at your turnover for the last 12 months, ignoring VAT and the cost of materials. It must be at least £30,000 for a sole trader; £30,000 for each partner or at least £100,000 for the whole partnership; or £30,000 for each director or at least £100,000 for the whole company.
A close company
If your company is controlled by 5 people or fewer, its annual turnover must be £30,000 for each of them.
Keeping it
HMRC reviews it every year.
The annual review
HMRC reviews your business every year to decide whether you keep the status - a limited company as a company, not its directors. You must be on time with your tax returns and payments; a small amount of lateness is allowed.
If you are about to fail
HMRC writes first, with the reasons. You can write back. If it does not accept your explanation, it writes again to say what you have not met and that the status goes in 90 days; you have 30 days to appeal.
Time to pay
If HMRC gives you more time to pay your tax, that does not affect your gross payment status.
Applying, and paying tax
How to apply, and how you pay instead.
Apply online or by post
There is a form for a sole trader, a partnership and a limited company. Applying also registers you for CIS if you are not registered already.
Paying your tax
You declare your payments as income at the end of the tax year: on your Self Assessment tax return as a sole trader or partner, or your company's Corporation Tax return.
If it is taken away
You wait a year from the date it was taken away before you can apply again.
HMRC's own words are in How to get gross payment status and Annual review. Turnover close to the line? Work out a deduction on an invoice.
What Stoneledger does
Your status, and what it means on every invoice.
- Your status by date. Registered, not registered or gross, and when each applied, so an invoice is always worked out at the status in force on the day it was raised.
- Your turnover, without VAT and materials, the figure the turnover test reads, from your own invoices.
- Every deadline for your returns and payments, because being on time is what keeps the status.
Your CIS status, held once and used everywhere.
Every invoice at the right rate on the day it was raised, and every deadline in view.