Who this is for: UK subcontractors (sole traders, partnerships, companies) and developers/main contractors who need clean CIS onboarding so you can verify subs quickly, pay correctly, and avoid HMRC re-work.
Why it matters: CIS registration determines whether a sub is paid net (under deduction) or gross (GPS 0%). Pick the right route, submit a complete application, and you reduce the odds of delays, 30% emergency deductions, or rejected GPS. HMRC supports online registration (fastest) and paper forms: CIS302 (sole trader), CIS304 (partnership), CIS305 (company). GOV.UK
At a glance: which CIS form do I use?
- Sole trader → CIS302 (register as a subcontractor; you can also apply for Gross Payment Status at the same time). GOV.UK
- Partnership → CIS304 (subcontractor registration and optional GPS). GOV.UK
- Limited company → CIS305 (subcontractor registration and optional GPS). GOV.UK
Faster option: Register online (net payment status by default, with the option to apply for GPS). You’ll need a UTR and Government Gateway ID; if you don’t yet have a UTR, you can register for Self Assessment and CIS together. GOV.UK
Paper/post alternatives:
- CIS302 (PDF) for individuals, CIS304 (PDF) for partnerships, CIS305 (PDF/notes) for companies; HMRC also provides postal “payment under deduction” pages for CIS304 and CIS305 if you can’t use the online route. GOV.UK
Before you apply (quick prep)
- Status first. CIS isn’t employment status — assess PAYE vs self-employed (use CEST) before you go near CIS. → CIS isn’t employment status: getting PAYE vs subcontractor right
- Know your aim: Net (payment under deduction) vs Gross Payment Status (GPS). GPS improves cashflow but has strict compliance tests. → How to qualify for (and keep) CIS Gross Payment Status in 2025/26
- Have details ready: legal name, UTR, NI/CRN, business address, bank details, trading start date, and construction turnover evidence (for GPS). See HMRC notes for each form. GOV.UK
GPS eligibility (the headline tests)
If you apply for Gross Payment Status with CIS302/304/305, HMRC checks:
- Business in the UK with a bank account, and
- Turnover threshold (typically £30,000 net construction turnover for sole traders; for companies/partnerships it’s £30,000 per director/partner or £100,000 for the entity as a whole), and
- Timely compliance with tax returns and payments (now including VAT). GOV.UK
If you already hold GPS, HMRC runs ongoing reviews; understanding the tolerance on late filings/payments helps you keep it. → CIS GPS tolerance explainer
Step-by-step (with the right form)
A) Sole traders: CIS302
- Get/confirm UTR and Government Gateway access; if new, register for Self Assessment and choose “working as a subcontractor.” GOV.UK
- Decide net vs GPS (read the GPS guide first). → GPS guide
- Apply online (fastest) or paper CIS302 (print/post). Keep copies for your verification pack. GOV.UK+1
- After approval, share your details with paying contractors for verification. → Subcontractor verification (CIS)
B) Partnerships: CIS304
- Confirm each partner has a UTR; nominate the registering partner on the form. GOV.UK
- Apply online where possible; otherwise use CIS304 (postal) for net or GPS. GOV.UK
- For GPS, prepare turnover evidence (e.g., £30k per partner or £100k entity threshold). GOV.UK
- Post-registration, expect contractor verification before first payment. → Subcontractor verification
C) Limited companies: CIS305
- Confirm company UTR, Companies House number, and bank details.
- Apply online or use CIS305 (postal) for net or GPS; HMRC publishes CIS305 notes to get it right first time. GOV.UK
- For GPS, check £30k per director or £100k entity turnover threshold and compliance history. GOV.UK
- Share details with contractors; they must verify you and apply the correct 0%/20%/30% rate on your jobs. → Subcontractor verification
After you register, what happens next?
- Contractor verification: your payers verify you and get the 0%/20%/30% instruction from HMRC. → Subcontractor verification
- Invoicing correctly: CIS applies to labour, not materials/eligible plant. → CIS invoice anatomy: labour vs materials
- If DRC applies: you don’t charge VAT; your customer reverse-charges it on the whole supply (and CIS still applies to labour only). → CIS vs VAT Domestic Reverse Charge & Reverse Charge VAT pitfalls
- Month-end: issue Payment & Deduction Statements and reconcile the CIS300 (file by the 19th, pay by the 22nd if electronic). → CIS300 & Payment/Deduction Statements
- Prefer to do it inside Xero/QuickBooks/Sage? → CIS returns & statements in Xero/QuickBooks/Sage
Worked micro-example: sole trader applying for GPS (CIS302)
You’re a UK-based sole-trader sub with a business bank account and £48,000 net construction turnover in the last 12 months; all SA/VAT returns and payments are up-to-date. You apply online and tick GPS. Your paying contractor verifies you and gets 0%. Result: better cashflow, fewer deduction statements, but keep monthly compliance tight so GPS isn’t withdrawn later (see tolerance guide). GOV.UK → GPS tolerance explainer
Common mistakes (and quick fixes)
- Using the wrong form (e.g., a company sending CIS302). Fix: pick CIS305 for companies; CIS304 for partnerships. GOV.UK
- Applying for GPS without evidence (turnover/compliance). Fix: follow HMRC notes and attach clear figures. GOV.UK
- Skipping online when you need speed. Fix: use the online service; post only if necessary. GOV.UK
- Assuming CIS = employment status. Fix: assess status with CEST first. → CIS isn’t employment status
Strong FAQ (practical & defendable)
Do I have to apply for GPS when I register?
No. You can register for net payment first and apply for GPS later, but if cashflow matters, consider applying at the same time via CIS302/304/305. GOV.UK
What are the GPS turnover thresholds?
Typically £30,000 net construction turnover for sole traders; for companies/partnerships it’s £30,000 per director/partner or £100,000 for the entity (see form notes). GOV.UK
We’re a contractor, which form do we use?
Contractor registration is a separate process (set up as a new employer to get PAYE refs, then follow HMRC’s CIS contractor steps). GOV.UK
Is paper still accepted?
Yes, but online is quicker. If posting, use the specific pages: CIS304 (partnership) and CIS305 (company) payment-under-deduction routes. GOV.UK
How long until I’m verified by payers?
Once registered, your contractors can verify you immediately and will be told 0%/20%/30%. Keep details exact (UTR/legal name) or you’ll be hit with 30% unmatched. → Subcontractor verification
Sources (GOV.UK & HMRC)
- Register online as a CIS subcontractor (net status; UTR/Gateway; SA + CIS together). GOV.UK
- CIS302 (sole trader) guidance & paper form. GOV.UK+1
- CIS304 (partnership) guidance & paper form/notes. GOV.UK+3GOV.UK+3GOV.UK+3
- CIS305 (company) guidance & notes; postal route. GOV.UK+2GOV.UK+2
- Register as a CIS contractor (PAYE/new employer flow). GOV.UK
Related guides (internal links)
- Subcontractor verification (CIS): what to check and store
- CIS invoice anatomy: labour vs materials (with worked examples)
- CIS vs VAT Domestic Reverse Charge: when both apply
- Reverse Charge VAT pitfalls
- CIS300 & Payment/Deduction Statements
- How to qualify for (and keep) CIS Gross Payment Status in 2025/26
- CIS GPS tolerance explainer
- CIS returns & statements in Xero/QuickBooks/Sage
- CIS isn’t employment status: getting PAYE vs subcontractor right
- Free resource: CIS setup checklist for developers (PDF)
Next Steps
Want this done cleanly — first time?
Book a 20-minute CIS Registration & GPS Check. We’ll:
- choose the right route (net vs GPS),
- complete the CIS302/304/305 pack with the evidence HMRC expects, and
- wire your verification → invoicing → CIS300 workflow so you’re defendable from month one.
You’ll leave with: a ready-to-submit CIS application pack, a verification checklist, and invoice templates aligned with CIS & DRC.
→ Book now