How do I verify a CIS subcontractor?

You verify a new subcontractor with HMRC before you first pay them, using the free HMRC CIS online service or commercial CIS software. In 2026-27 you can skip it if they appeared on your CIS returns since 6 April 2024.

Verification is how HMRC tells you what rate to deduct. You send the subcontractor's details, HMRC checks whether they are registered for the Construction Industry Scheme (CIS), and you get back one of three answers: pay them gross, deduct 20%, or deduct 30%. Get it wrong and the shortfall can land on you, because HMRC's CIS 340 guide says the contractor pays over the deduction that should have been made, whether or not it was.

When you need to verify

The rule behind the table is in regulation 6 of the CIS Regulations 2005: you do not need to verify anyone you included on a return in the current tax year or the 2 before it.

What you need to hand

GOV.UK says the details you give must exactly match the ones the subcontractor used to register, so ask for their details as registered, not a nickname or trading name.

About you, GOV.UK lists:

• your Unique Taxpayer Reference (UTR)
• your HMRC accounts office reference
• your employer reference

About a sole trader subcontractor:

• their name, exactly as registered
• their UTR
• their National Insurance number; temporary numbers starting with TN or 2 digits cannot be verified

For a limited company you need the company name, company UTR and registration number. For a partnership, the nominated partner's details, the trading name and the partnership UTR. Regulation 6 also says you can only verify once you have a contract with the subcontractor or have formally accepted their tender for the work.

What this means for you

Ask for the details before the subcontractor starts, not on the Friday you want to pay them. If HMRC cannot match them, you must deduct 30% and give them a verification reference with a letter on the end. That reference goes on your monthly return and on their payment and deduction statement, and they will need it later to get credit for the deductions.

You only verify once in the normal run of things. After that, HMRC writes to you if the subcontractor's status changes. CIS 340 says that when someone loses gross payment status, contractors who used them in the current or previous 2 tax years get 35 days' notice of the change.

If you verify more than 50 subcontractors, GOV.UK says you need commercial CIS software rather than the free online service.

Steps to verify a subcontractor

1. Check you are registered as a contractor and have your UTR, accounts office reference and employer reference.
2. Get the subcontractor's legal name, UTR and National Insurance number, or company or partnership details, exactly as registered with HMRC.
3. Check your own records: if they were on one of your CIS returns since 6 April 2024, pay them on the same basis as last time.
4. Otherwise, verify them through the HMRC CIS online service or your CIS software.
5. Note the rate HMRC gives and the verification reference.
6. Make the deduction from the next payment, give a payment and deduction statement by the 19th after that tax month ends, and include them on your monthly return.

A worked example

Kev, a sole trader groundworker, takes on two self-employed labourers for a drainage job. Each invoices £1,500 for labour, with no materials. The first gives his details exactly as registered, verifies at 20%, and Kev deducts £300 and pays him £1,200. The second, Tom, has never registered for CIS, so HMRC cannot verify him and tells Kev to use the higher rate. Kev must deduct 30%, which is £450, and pay £1,050. Kev records the verification reference, with its letter, on Tom's statement and on his monthly return.

To see how the deduction is worked out when materials are involved, read how to work out a CIS deduction. Use the free MTD check to see whether Making Tax Digital applies to you from April 2027, and the trades section has more on CIS.