CIS Gross Payment Status for UK Construction: Everything You Need to Know
Looking to improve your cash flow and keep more of your payments? Understanding CIS Gross Payment Status can be a real game-changer if you’re in the building or construction trade. You’ll receive money without immediate tax deductions, so you stay in control of your finances—provided you manage your tax obligations carefully.
In this guide, we’ll answer the top questions about CIS, what Gross Status means, and how you can qualify.
What is CIS Gross Status?
The Construction Industry Scheme (CIS) requires contractors to deduct tax from your payments at 20% (or sometimes 30%). That’s known as Net Status.
Gross Status, on the other hand, lets you receive full payments from contractors—no deductions taken off at the source. You then handle your tax at the end of the financial year via Self Assessment or Corporation Tax.
Why It Matters: This setup can massively help your cash flow if you plan and budget for your tax bill in advance.
Why is it Different from Net Status?
- Net Status: Your tax is partly prepaid every time you get paid.
- Gross Status: You get 100% of your money throughout the year, then pay tax later in one lump sum.
Key Upside: If you’re organised, you can invest that extra cash and manage your finances more flexibly.
Key Downside: If you’re not disciplined, you could be in trouble when the tax man comes knocking.
Do I Really Benefit from Having Gross Status?
Most construction businesses benefit because:
- Cash Flow: You aren’t losing money right off the bat.
- Less Need for Loans: Better cash flow means fewer overdrafts or short-term loans.
- End-of-Year Clarity: It’s easier to see how much tax you actually owe once you know your final profits.
Still, remember you must keep back enough for that tax bill, so it’s best suited to those comfortable staying on top of their finances.
How Do I Get Gross Status?
HMRC checks three main areas before granting Gross Status:
- Business Test: You’re genuinely in the UK construction industry and operate through a bank account.
- Turnover Test: Your turnover (minus VAT and materials) meets HMRC’s thresholds:
- £30,000 for a sole trader.
- £100,000 for a company or partnership (or at least £30,000 per director/partner).
- Compliance Test: You must have filed returns and paid taxes on time for the last 12 months (no major late submissions or missed deadlines).
Apply by:
- Visiting your Government Gateway account online, or
- Filling out the postal form that matches your business structure.
Once approved, HMRC reviews you annually—so you’ll need to keep your tax affairs in good shape.
What if I Lose Gross Status?
If HMRC feels you’re not complying (for instance, multiple late returns or tax payments), they’ll:
- Send a CIS 308 notice, warning that your Gross Status might be revoked.
- Give you a chance to appeal the decision.
- If revoked, you’ll go back to the usual 20% or 30% deductions.
Getting it back usually requires 12 more months of consistent compliance.
FAQs People Often Ask
Q1. Will I pay more tax?
A1: No. The total amount of tax doesn’t change—just how and when you pay it.
Q2. Is Gross Status right for everybody?
A2: If you’re good with saving for your tax bill, it’s often a win. If you struggle with financial organisation, net status might be safer.
Q3. Can I apply right away if my turnover is borderline?
A3: If you’re borderline, speak to an accountant first. You might need to wait until you can clearly show enough turnover.
Get The Right CIS Help And Advice With Blue Rocket Accounting
Whether you’re a limited company, a sole trader, or you have subcontractors under you, we can handle your CIS needs. We’ll help you stay on track with Gross Status or manage the usual deductions if you’re on Net Status.
Benefits of Being a Blue Rocket Accounting Customer
- Full CIS Support: From registration to monthly returns, we’ll take care of it—no stress on your end.
- Tailored Services: Whether you’re a one-person sole trader or a bustling limited company, we adapt to your needs.
- Tax Planning: We help you budget for that year-end tax bill so there are no surprises.
- Compliance & Peace of Mind: Avoid penalties and keep HMRC happy with on-time filings and accurate bookkeeping.
- Friendly, Jargon-Free Advice: Our team makes everything easy to understand
“It’s not rocket science, it’s just great accounting!”
If you’re curious about Gross Status or just need an expert to handle your CIS every month, reach out to Blue Rocket Accounting. We’ll make sure your tax obligations don’t get in the way of growing your business.
Want to Explore More CIS & Construction?
We think you’ll find the below blogs quite helpful
- Domestic Reverse Charge (DRC) VAT Explained for Construction Businesses | Blue Rocket
- CIS Subcontractor Rebates | Blue Rocket
- Accounting for Construction Businesses
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