Gross Payment Status — keep 100% now
With Gross Payment Status (GPS) contractors pay your invoices in full. Nothing is held back, so the cash stays in your account and you settle Income Tax and National Insurance through Self Assessment instead. For a subcontractor invoicing £120,000 of labour a year, that is £24,000 of cash flow you keep hold of rather than waiting for a refund.
The three HMRC tests
Business test
You carry out construction work in the UK, as a sole trader, partnership or company, and you run the business through a bank account.
Turnover test
At least £30,000 of labour-only turnover in the last 12 months (excluding VAT and materials). Partnerships and companies need £30,000 per partner or director, or £100,000 for the whole business.
Compliance test
All tax returns and payments filed and paid on time in the last 12 months. HMRC allows a small number of minor slips but repeated lateness fails you.
How to apply
- Make sure you are registered under CIS as a subcontractor first.
- Gather 12 months of labour-only invoices to prove turnover, plus your UTR and National Insurance number.
- Apply online through your HMRC business tax account, or by phone on the CIS helpline.
- HMRC reviews your compliance history and writes to you, usually within a few weeks. Contractors then verify your 0% rate before paying.
Keeping it
HMRC reviews GPS every year. Late Self Assessment, late CIS returns or unpaid tax can get it cancelled, and you drop back to 20%. Put the tax aside monthly — the biggest reason subcontractors lose GPS is spending money that was always HMRC's.
See what 0% would be worth to you