Check Your Gross Payment Status (GPS) Eligibility

What is Gross Payment Status (GPS)?

Gross Payment Status (GPS) is an approval from HM Revenue & Customs (HMRC) under the Construction Industry Scheme (CIS) that allows subcontractors to be paid in full without tax deductions at source. Instead, subcontractors are responsible for declaring their income and paying any tax and National Insurance themselves.

How to obtain CIS Gross Payment Status (The Complete Guide)

Getting Gross Payment Status (GPS) means main contractors will pay your invoices in full, without deducting 20% or 30% for HMRC. It is brilliant for your cash flow, but HMRC does not hand it out easily.

To get GPS, you must pass three specific tests. If you fail even one of these, HMRC will reject your application.

1. The Business Test

HMRC first needs to know that you are running a legitimate construction business. To pass this, you must prove that:

• You are doing construction work (or providing labour for it) in the UK.
• Your business is run largely through a dedicated business bank account. HMRC will look for this to ensure your finances are separated from your personal spending.

2. The Turnover Test

This is the financial hurdle. HMRC wants to see that your business is turning over a specific amount of money from construction work.

Crucial rule: When calculating your turnover for this test, you must exclude VAT and the cost of any materials. HMRC only cares about the labour element of your income over the last 12 months.

• For Sole Traders: Your net construction turnover must be at least £30,000.
• For Partnerships or Limited Companies: The turnover must be at least £30,000 for each partner or director. Alternatively, if the whole company's net turnover exceeds £100,000, you automatically pass, regardless of how many directors you have.

3. The Compliance Test (The 12-Month Clean Record)

This is where most subcontractors fail. HMRC will look at your tax history for the 12 months immediately before your application. You must have a spotless record.

To pass, you must have:

• Completed and returned all Self-Assessment or Corporation tax returns on time.
• Paid all tax liabilities (including Corporation Tax, PAYE, and National Insurance) on time.
• Supplied any requested information to HMRC regarding your tax affairs.

Note: HMRC will sometimes overlook minor delays (e.g., a payment that was 14 days late, or a single late return), but a history of missed deadlines will result in an automatic rejection.

How to Apply for Gross Payment Status

If you meet the criteria for all three tests, you can apply immediately. You must already be registered for the Construction Industry Scheme (CIS) before you can apply for GPS.

1. Online (Fastest): Log in to your HMRC Government Gateway account. Navigate to your CIS dashboard and select the option to apply for Gross Payment Status.
2. By Phone: You can call the CIS Helpline directly on 0300 200 3210. Make sure you have your Unique Taxpayer Reference (UTR) and National Insurance number to hand.

What Happens After You Apply?

HMRC usually processes the application within 30 days. If approved, they will notify you and update your status on their systems. You can then inform your main contractors to stop making the 20% deduction.

A Word of Warning: Gross Payment Status is not permanent. HMRC runs an automated annual review. If you start filing your tax returns late or missing payments, HMRC can and will revoke your GPS, dropping you back down to the standard 20% deduction rate.