CIS: Gross Payment Status (GPS) Turnover Test

What is it?

The Gross Payment Status (GPS) turnover test under the Construction Industry Scheme (CIS) applies to subcontractors who wish to receive payments without deductions of CIS tax.

In other words, subcontractors with GPS can be paid gross (without the standard 20% deduction at source).

Subcontractors who have already registered for CIS can apply for GPS online via the HMRC website.

Gross Payment Status (GPS) enables workers to be paid gross with no CIS deductions

Requirements to Qualify for Gross Payment Status (GPS)

To qualify for GPS subcontractors must meet the following three tests:

1. Business Test

You must be genuinely carrying on construction work in the UK and operating in a business-like manner. This includes maintaining a business bank account, proper records, and issuing invoices.

2. Turnover Test

Net construction income (excluding VAT and cost of materials) must meet the minimum threshold in the 12 months before applying for GPS:

Entity Type	Required Turnover (Last 12 Months)
Sole Trader	£30,000
Partnership	£30,000 per partner or £100,000 total
Company	£30,000 per director/shareholder or £100,000 total

3. Compliance Test

Applicants must have a good compliance record with HMRC, including:

• Submitting all tax returns on time

• Paying all tax and National Insurance contributions on time

• No serious record of non-compliance

Summary

To qualify for Gross Payment Status under CIS and receive gross payment without CIS deductions, a subcontractor must:

• Operate a legitimate construction business

• Meet the required turnover threshold from construction work

• Maintain good compliance with HMRC requirements

Points to note:

GPS can be withdrawn by HMRC and is not automatically reinstated. Loss of GPS may incur penalties, affect cash flow, damage reputation and create additional admin.

This document is a simplified helpsheet and careful research should be completed if you are unsure.

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