Gross CIS receipts

I am a registered subcontractor, and I currently receive payments from my customers after the deduction of tax. I got talking to my mate down the pub, and he reckons he gets his money gross. Am I able to receive my invoices gross too?

1st August 2011

There are three tests that your business must satisfy in order to apply to HM Revenue & Customs (HMRC) to receive your payments gross. In order to qualify, the business must:

1. Business Test

  • Do construction work in the UK
  • Largely run through a bank account

2. Turnover Test

  • Have a turnover excluding VAT and the cost of materials of at least £30,000 per annum (please note there a different limits for directors of companies and partners)

3. Compliance Test

  • Have complied with all its tax obligations in the 12 months before applying
  • Have submitted all tax returns on time in the 12 months before applying
  • Have paid all tax due on time in the 12 months before applying

There are some exceptions to the Compliance Test and HMRC will allow you some slip-ups.

To apply, use HMRC form CIS302 (please note, there are other forms for partners and companies). If you would like any assistance with or advice about the application process or any other matter, please do not hesitate to contact your local TaxAssist Accountant.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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