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How to register for CIS

We've updated this guide on 12th February 2021

What you need to do

  1. Register for HMRC’s online service and enrol for self-employment
  2. You’ll get your Government Gateway ID (email) & UTR number (by post)
  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. Done.

Why do I need to register for CIS?

If you’re self-employed and working in the construction industry, then you have to register for the Construction Industry Scheme (CIS).

If you don’t, then your payslips 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. They can also be removed if you register for “gross payment” status.

Difference between gross pay and net pay status

Net payment status

  • Taxes withheld: 20% instead of 30%
  • Everyone qualifies.

The main benefit of choosing Net Payment is that your contractor will only withhold 20% of your earnings, instead of 30%.

You’ll still likely end up overpaying your taxes and need to claim a refund.

Gross payment status

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

With gross payment status, HMRC will no longer ask your contractor to withhold tax payments, so it is your responsibility to calculate and pay your taxes.

However, 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 making your business payments through a bank account.

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