If you’re starting out as a sole trader subcontractor, registering for CIS is well worth doing early. It means contractors can verify your details before they pay you and, in most cases, deduct tax at the standard 20% rate rather than 30%.
Any extra tax deducted can normally be reclaimed through Self Assessment. Even so, most subcontractors would rather keep more of their earnings throughout the year than wait for a refund.
If you’re new to self-employment, you’ll usually register as a sole trader first. HMRC can then register you for CIS at the same time, so there’s no need to go through two completely separate registration processes.
You need a Unique Taxpayer Reference before you can register for CIS online.
If you don’t have one yet, register as a sole trader for Self Assessment and select the option confirming that you’ll be working as a construction subcontractor. HMRC should then register you for Self Assessment and CIS together.
Who should register as a CIS subcontractor?
You should register if you carry out construction work for a contractor and operate as:
- a sole trader
- a partner in a partnership
- the owner of a limited company
This includes many builders, carpenters, plumbers, electricians, roofers, decorators and other tradespeople working on construction projects.
Being paid under CIS doesn’t automatically mean you’re self-employed. Before the scheme even comes into play, it’s important to establish whether you’re genuinely working as a subcontractor or should be treated as an employee.
Read more in our main guide to how the Construction Industry Scheme works for self-employed subcontractors, including the types of work covered and how deductions are calculated.
Is CIS registration compulsory for sole traders?
You are not legally required to register if you’re a subcontractor, but there is a strong financial reason to do so.
Contractors normally deduct:
- 20% from payments to registered subcontractors
- 30% when the subcontractor cannot be matched to an HMRC CIS record
- nothing where the subcontractor has Gross Payment Status
These percentages generally apply to the labour element of the payment rather than the full invoice. The deductions are sent to HMRC and later set against the tax and National Insurance due on your business profits.
The 30% deduction is only a deduction, not the final tax rate you’ll have to pay. If too much tax has been paid during the year, HMRC will normally take this into account when your Self Assessment return is processed.
Register as a sole trader first
You need to be registered for Self Assessment before HMRC can add you to CIS.
Someone starting a new business can use HMRC’s sole trader registration service. When asked about the work you do, select the option confirming that you will be working as a construction subcontractor. This should register you for both Self Assessment and CIS.
90% off Xero Accounting Software for 6 months
Fully compatible with Making Tax Digital (MTD) for sole traders from April 2026.
ByteStart also has a separate guide covering how to register as self-employed with HMRC.
HMRC will issue a ten-digit Unique Taxpayer Reference after your Self Assessment registration has been processed. Keep this number safe. Contractors will need it when checking your CIS status.
You can read more about where to find the number and when it is used in our guide to Unique Taxpayer References.
Already have a UTR?
If you have previously registered as a sole trader, you may already have a UTR but not be registered for CIS.
You can add CIS registration separately through HMRC’s online subcontractor registration service.
HMRC describes this as registration for “net payment status” or “payment under deduction”, both of which mean that contractors normally use the 20% rate.
Don’t create another Self Assessment record just because you are starting construction work. Registering twice can leave you with duplicate records that later need to be corrected. ByteStart covers this in more detail in its guide to accidentally registering twice with HMRC.
What information will you need?
Have the following details ready before starting the application:
- your UTR
- your National Insurance number
- the legal name used for your Self Assessment record
- your trading name, if you use one
- your business address
- the date you started trading
- your VAT number, where applicable
Check that the details you give the contractor match the ones HMRC already has. Even something as simple as a different trading name or a spelling mistake can cause problems when they try to verify you.
How to register for CIS online
The quickest route is HMRC’s online service.
Sign in using the Government Gateway details linked to your Self Assessment account, check the business information shown and complete the CIS questions. If you don’t have sign-in details, you should be able to create them during the process.
You can start through the GOV.UK CIS registration page.
Register using the same legal business details that you intend to give to contractors. Once the application has been accepted, keep the confirmation with your other tax records.
HMRC no longer normally registers subcontractors by telephone. A postal route remains available for people who cannot use the online service. Sole traders registering for payment under deduction can use form CIS301.
What happens after registration?
Give each contractor your:
- legal business or trading name
- UTR
- National Insurance number, if requested
The contractor uses these details to verify you with HMRC. The verification result tells them whether to deduct 20%, use the higher 30% rate or pay you gross.
Even after you’ve registered, the contractor still needs to verify your details with HMRC before making the first payment.
Use the same business name and UTR that HMRC has on record. If the details don’t match, the contractor may not be able to verify you, which can mean the higher 30% deduction is applied until everything is sorted.
Keep every CIS payment statement
The contractor should give you a payment and deduction statement showing:
- the gross amount of the payment
- any materials excluded from the calculation
- the CIS deduction made
- the amount paid to you
Keep your own copies of invoices and payment statements too. If something doesn’t look right, it’s much easier to get it corrected while the work is still fresh in everyone’s mind.
CIS deductions are not your final tax calculation. A sole trader must still report business income and allowable expenses through Self Assessment. The deductions already paid are then set against the resulting Income Tax and National Insurance bill.
Can you register for Gross Payment Status?
Gross Payment Status allows qualifying subcontractors to receive their payments without CIS deductions.
Gross Payment Status improves cash flow because contractors pay you in full rather than making CIS deductions. You’ll still pay Income Tax in the normal way, so it’s important to budget for it.
Gross Payment Status isn’t available automatically. HMRC only grants it to businesses that meet its turnover and compliance requirements. Read more in this HMRC Gross Payment Status guide.
A new sole trader who doesn’t qualify can still register for the standard 20% deduction rate.
What if you also pay subcontractors?
It’s common to work under a CIS for one contractor while bringing in other tradespeople for your own jobs.
For example, a sole trader builder might be paid as a subcontractor on a large development and later hire a plumber for a domestic extension. The builder could then be both a CIS subcontractor and a CIS contractor.
Registering as a subcontractor doesn’t automatically make you a CIS contractor. If you start paying other subcontractors, you’ll usually have a separate set of responsibilities, including verifying them with HMRC and submitting monthly CIS returns.
It’s much easier to get this right before you start paying subcontractors than to unravel it later.
Do you need to register each year?
You won’t normally need to register again each year. Your CIS registration simply continues as long as you keep trading in the same way.
A change from sole trader to limited company is different because the company is a new legal entity. The company will need its own UTR and CIS registration, even if you were previously registered as an individual.
You should also tell HMRC when your business details change or when you stop trading. Our checklist covers the steps involved in closing down a sole trader business.
Registering before your first job means the contractor can verify your details before payment is due. Once you’re up and running, keep your CIS statements with your invoices and other tax records – they’ll make completing your Self Assessment much easier.
