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CIS Verification: How to Verify Subcontractors with HMRC

Free CIS verification checklist for UK contractors. Step-by-step guide to verifying subcontractors with HMRC, deduction rates, UTR checks, and common mistakes to avoid.

Overview

CIS verification is the process of checking a subcontractor's details with HMRC before making payment. Getting verification wrong means applying the wrong deduction rate - either overtaxing your subbies or facing HMRC penalties for under-deduction. This guide explains exactly what verification means and how to do it right.

2 free templates — download below

Key Takeaways

  • Always verify before making the first payment
  • Record verification reference and date
  • Re-verify at least annually
  • Use the exact legal name, not trading name
  • When in doubt, call HMRC to clarify

What is CIS Verification?

When you take on a new subcontractor, you must verify them with HMRC before making the first payment. HMRC will confirm their registration status and tell you which deduction rate to apply. This protects you from penalties and ensures your subcontractor is taxed correctly.

  • Must verify before first payment
  • HMRC confirms the correct deduction rate
  • Verification is valid until circumstances change
  • Re-verify annually or when details change

The Three CIS Deduction Rates

HMRC will tell you which of three deduction rates applies to each subcontractor. The rate depends on their registration status and payment history with HMRC.

  • 0% (Gross Payment Status): Subcontractor receives payments without deduction
  • 20% (Registered/Verified): Standard rate for registered subcontractors
  • 30% (Unregistered/Unverified): Higher rate for those not properly registered

Download Templates

CIS Verification Checklist

Printable checklist covering all verification requirements and common mistakes.

PDF

Subcontractor Onboarding Form

Form to collect all information needed for CIS verification from new subcontractors.

PDF

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Information Needed for Verification

What you need depends on whether the subcontractor is an individual, company, or partnership. Having the right information before contacting HMRC makes the process faster.

  • Individuals: Name, UTR, National Insurance number
  • Companies: Company name, UTR, Company registration number
  • Partnerships: Partnership name, UTR, Partner details
  • All: Trading name if different from legal name

How to Verify with HMRC

You can verify subcontractors online through your HMRC business account or by phone. Online is faster and provides immediate confirmation.

  • Online: Log into HMRC business account > CIS > Verify a subcontractor
  • Phone: Call HMRC CIS helpline with subcontractor details
  • Keep verification reference numbers
  • Record the date of verification

When to Re-Verify

Verification isn't forever. You should re-verify subcontractors periodically and whenever circumstances change to ensure you're still applying the correct rate.

  • At least annually for ongoing subcontractors
  • When subcontractor changes legal status (e.g., sole trader to limited)
  • When subcontractor provides new details
  • When you receive HMRC notification of status change

Common Verification Mistakes

Avoiding these common errors will save you time, protect your subcontractor relationships, and keep you compliant with HMRC.

  • Not verifying before first payment
  • Using incorrect or outdated UTR
  • Confusing trading name with legal name
  • Not keeping verification records
  • Applying the wrong rate without checking
See the softwareCIS Verification Software

Related

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Back to CIS Compliance Hub

CIS Verification FAQ

If you don't verify, you must apply the 30% unregistered rate. If you apply a lower rate without verification and HMRC later determines the subcontractor was unregistered, you'll be liable for the difference plus potential penalties.
No. Verification is done by the contractor (payer), not the subcontractor. The subcontractor can register for CIS and check their own status, but the paying contractor must perform verification.
Online verification is usually instant. Phone verification typically takes 5-10 minutes once you get through. Keep your subcontractor's details ready to speed up the process.
If HMRC cannot verify (details don't match, UTR invalid, etc.), you must apply 30% deduction. The subcontractor should contact HMRC to resolve the issue, after which you can re-verify.

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