GPS means no CIS deduction at all. You receive every payment in full. The April 2026 anti-fraud changes make applying for GPS straightforward but keeping it requires active due diligence. We manage both.
Without GPS, 20% of your labour income is taken every month before you see it. With GPS, every payment arrives in full. The cash flow difference compounds across a full year's work.
| Annual CIS turnover (labour) | With GPS (0%) | Without GPS (20%) |
|---|---|---|
| £40,000 | £40,000 received gross | £32,000 received (£8,000 held by HMRC) |
| £80,000 | £80,000 received gross | £64,000 received (£16,000 held) |
| £150,000 | £150,000 received gross | £120,000 received (£30,000 held) |
| £500,000 | £500,000 received gross | £400,000 received (£100,000 held) |
Figures illustrative. CIS deductions count as advance payments against your eventual tax bill, so they are refundable, but only after the tax year ends. GPS eliminates the cash flow cost entirely.
GPS is not automatic. You must pass all three tests before applying, and maintain compliance to keep the status active.
You carry out construction work (or provide labour for construction work) in the UK, and you run the business through a bank account. This test is straightforward for most active subcontractors.
Your net annual CIS turnover must reach the relevant threshold for your entity type. Net means excluding VAT and excluding the cost of materials you purchase for jobs. The measurement period is the last 12 months of CIS-relevant construction work.
All your tax obligations must have been met on time for the past 12 months: no late Self Assessment returns, no overdue tax bills, no PAYE defaults. A clean 12-month record is required before applying.
| Entity type | Net annual CIS turnover required |
|---|---|
| Sole trader | £30,000 |
| Partnership | £30,000 per partner OR £100,000 total |
| Limited company | £30,000 per director OR £100,000 total |
| Closely controlled company (5 or fewer controllers) | £30,000 per controller |
Net turnover excludes VAT and the cost of materials purchased for jobs. The measurement period is the last 12 months of CIS-relevant construction work.
Finance Bill 2026 introduced a tougher GPS regime in force from 6 April 2026. Qualifying is no longer the end of the story. Keeping GPS now requires active ongoing due diligence.
From 6 April 2026, HMRC can remove GPS without advance notice where a contractor knew or should have known about fraudulent connections in the supply chain. The 'should have known' standard is key: failure to carry out due diligence is sufficient for revocation. HMRC does not have to prove you intended any wrongdoing.
GPS removed on fraud grounds now triggers a 5-year ban on reapplication (previously 1 year). The cash-flow cost is severe: roughly £100,000 a year for a contractor earning £500,000, because 20% is deducted at source on every payment instead of 0% with GPS.
Finance Bill 2026 ss.62A/62B allow individual directors to face penalties of up to 30% of the tax HMRC considers lost due to fraudulent transactions. The liability reaches the individual, not just the company.
To meet the 'should have known' standard, a contractor must before each payment: re-verify the CIS status of each subcontractor with HMRC, run a Companies House legitimacy check on the subcontractor's company, and carry out bank account name verification to confirm the payment recipient is genuine.
We assess whether you meet all three qualifying tests before applying. We handle the application with HMRC. We maintain the compliance record and advise you on the three due-diligence steps required to protect the status under the April 2026 rules: subcontractor re-verification, Companies House legitimacy checks and bank account name verification. When GPS is granted, we monitor the ongoing compliance position so you are not caught by an unexpected revocation.
Book a free call. We will assess whether you meet the three qualifying tests and explain the process. No hard sell, no obligation.
Also interested in a CIS refund? See our refund service.
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