How to register for CIS

How CIS registration works - step by step

The simplest way of registering for CIS is online at HMRC's website. The steps below assume you are registering for CIS as self employed.

  1. If you already haven't - register for HMRC's online service at the Government Gateway and enroll for self-employment.
  2. You'll get your government gateway ID (email) & UTR number (by post) - you'll need both
  3. Register for CIS at HMRC's website using your government gateway ID
  4. Choose your CIS payment status - net pay or gross pay (more details about it below)
  5. You're done

Why I need to register to CIS?

If you're sole trader or self employed and working in the construction industry you have to register for the Construction Industry Scheme (CIS). If you don't - then payments you receive for your work will have 30% deducted from them as taxes and given to HMRC as tax payments on your behalf.

When you register for CIS these deductions are reduced to 20% when you register for "net payment" status and removed entirely when you register for "gross payment" status.

"Gross payment" is the best option for your cash flow but you're 1) expected to make your annual tax calculations and payment yourself 2) you need to meet certain conditions in order for HMRC to give you this status.

Difference between gross pay and net pay status

Net payment status

  • Taxes withheld from your payments: 30% to 20%
  • Everyone qualifies

Main benefit of registering for Net Payment is that the tax withholdings made to you by your employer will be reduced to 20%. You'll still likely end up overpaying your taxes by the end of the year and will need to claim a refund.

Gross payment status

  • Taxes withheld from your payments: 0%
  • You need to meet qualifications criteria

With gross payment status HMRC will no longer ask your employer (contractor) to withhold tax payments that are made to you and it is your responsibility to prepare and pay your taxes. However in order to get this status you need to meet the following criteria

  • You've paid your taxes on time in the past
  • Your turnover is over £30 000
  • You're doing your business payments through a bank account

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