If you’re managing subcontractors under the Construction Industry Scheme (CIS), you’ll know the importance, and hassle, of verifying their status with HMRC. Verify Subcontractors.
But one common question we’re frequently asked by construction firms is:
“Do I really need to verify subcontractors every single time I pay them?”
The short answer: No – but it’s not quite as simple as verifying them once and forgetting about it forever.
In this blog, we’ll clearly explain exactly when you do (and don’t) need to verify subcontractors under CIS.
✅ When Do You Need to Verify a Subcontractor?
HMRC requires you to verify subcontractors before their first payment. Verification checks if:
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They’re registered for CIS
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The correct deduction rate applies (20%, 30%, or gross payment status)
Once verified, HMRC provides you with:
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A verification number
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The correct deduction rate
Keep this reference number safe—you might need it for future HMRC checks.
❌ When You Don’t Need to Re-Verify a Subcontractor
You do not need to verify a subcontractor each time you pay them if:
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You’ve already verified them previously.
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You’ve made payments to them within the current or two previous tax years.
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You have their correct Unique Taxpayer Reference (UTR) and verification number.
If these conditions are met, you can simply continue using the original verification rate.
⚠️ When You DO Need to Re-Verify a Subcontractor
You must re-verify subcontractors if:
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You haven’t paid them within the current or past two tax years.
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They change their business status (e.g., sole trader becoming a limited company).
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You suspect their CIS status might have changed.
If you fail to re-verify in these scenarios, HMRC might penalise you for incorrect deductions.
📅 Practical Example: When to Re-Verify
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You verify a subcontractor and pay them regularly. After two years, you stop using their services.
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Three years later, you start working with them again.
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You must re-verify, as it’s been more than two tax years since your last payment.
🖥️ How to Verify Subcontractors Easily (Step-by-Step)
Step 1: Gather Subcontractor Information
You’ll need their:
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UTR (Unique Taxpayer Reference)
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Business/trading name
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National Insurance number (for sole traders)
Step 2: Verify Online or Through CIS-Compatible Software
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HMRC’s CIS online service (via gov.uk)
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Accounting software like Xero, QuickBooks, or Sage (recommended for speed and accuracy)
Step 3: Record Verification Results
Keep records of:
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Verification number
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Deduction rate provided by HMRC
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Date of verification
🚫 Common Mistakes Contractors Make
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Forgetting to verify new subcontractors
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Using outdated verification rates
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Not re-verifying after long gaps in payments
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Misplacing verification numbers (important for audits)
All these mistakes can result in:
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Incorrect deductions (typically too little or too much tax deducted)
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HMRC penalties and compliance reviews
🧾 Best Practices for CIS Verification
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Always verify new subcontractors before their first payment.
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Regularly check your CIS records—especially if you have subcontractors you haven’t paid recently.
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Keep verification numbers organised and secure, ideally digitally.
🛠️ Tools to Simplify CIS Verification
Software can automate the verification process, making it quick and error-free:
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Xero (built-in CIS verification)
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BrightPay (combined CIS and payroll)
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SubbieHub (specialist subcontractor management)
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QuickBooks with advanced payroll
👷♂️ Need Help Managing CIS Compliance?
At Thomas Emlyn Ltd, we specialise in CIS compliance for construction businesses, ensuring you:
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Verify subcontractors correctly (and at the right times)
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File accurate CIS returns every month
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Avoid HMRC penalties and audits
📞 Book a free discovery call – we’ll take care of your CIS admin, letting you focus on growing your construction business.
📌 Final Thoughts
You don’t have to verify subcontractors every single time—but it’s essential you understand when verification is needed.
Stay organised, use good software, and get expert advice if you’re unsure. Good CIS management makes for a stress-free HMRC experience.
