CIS Gross Payment Status Checker
CIS Gross Payment Status Checker
The three tests for gross payment status, and the one that fails people who thought they had passed it. HMRC measures the turnover test on net construction turnover, which its own manual defines as gross income from construction work excluding VAT and the cost of materials. So a sole trader who invoiced £48,000 with £20,000 of materials has £28,000, and fails the £30,000 threshold by £2,000, having looked at the invoice book and assumed they were nowhere near the line.
CIS Gross Payment Status Checker
Turnover, for this test, means labour. HMRC measures it on construction income less VAT and less the cost of materials, which is why people who invoice well over the threshold still fail it.
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Three things worth knowing
Turnover for this test is net construction turnover, which HMRC defines as gross income from construction work excluding VAT and the cost of materials.
A partnership or company needs £30,000 for each relevant person or £100,000 in total, whichever is easier to meet. The alternative exists so a company with six directors is not asked for £180,000.
Gross payment status is a cash flow gain, not a tax saving. The same tax is due either way, just later.
Check it before you apply
The workbook runs the same three tests and works out how much labour turnover you would need to add to pass.
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