How to Verify a CIS Subcontractor Before Payment

You must verify a CIS subcontractor before paying their first invoice. Use HMRC's CIS online service or commercial CIS software, enter the subcontractor's registered legal-entity details, then apply the deduction status HMRC returns. The exception is a subcontractor your business has already included on a CIS return in the current tax year or either of the previous two tax years.

HMRC guidance on when to verify subcontractors states that a contractor must verify a previously used subcontractor if they have not included that subcontractor on a CIS return in the current or last two tax years. This is a tax-year return test, not a requirement to reverify every two calendar years, and there is no separate condition based on whether the subcontractor's rate appears unchanged.

Situation at payment approval	Verification action
New subcontractor	Verify before making the first payment.
Previously used and included on your CIS return in the current or previous two tax years	No further verification is required under the return-history test. Use the status already held unless HMRC has notified you of a change.
Previously used but not included on your CIS return in that period	Verify again before payment.
Same people now invoicing through a different legal entity	Set up and verify the new entity using its own registered details.

HMRC's free online service is suitable for individual and smaller-volume checks. If you need to verify more than 50 subcontractors, HMRC requires commercial CIS software. Telephone verification is not a current channel, so do not rely on old guidance that gives a CIS helpline as an alternative.

Hold the invoice until the check is complete. Verification tells you whether the subcontractor is registered for CIS and whether to pay gross or deduct at 20% or 30%; it does not confirm that every other aspect of the invoice is correct.

Match the subcontractor to the correct legal entity

HMRC matches the verification request against the details the subcontractor used when registering. A familiar trading name on an invoice is therefore not enough if the CIS record belongs to a sole trader, partnership or company under a different registered name.

Before starting, have your own contractor UTR, HMRC accounts office reference and employer reference available. Then collect the subcontractor details for the legal entity that will receive the payment:

Subcontractor type	Details needed for the match
Sole trader	UTR and National Insurance number. HMRC will not accept a temporary National Insurance number beginning with “TN” or two digits.
Limited company	Company name, company UTR and company registration number.
Partnership	Nominated partner details, trading name and partnership UTR.

Enter the names and identifiers exactly as registered with HMRC. If the invoice displays a site name or trading style, reconcile it to the authorised supplier record before submission instead of altering the legal name to resemble the invoice. A mismatch in punctuation is not a reason to guess which entity is being paid; ask the subcontractor to confirm the registered details when the records do not agree.

A change from sole trader or partnership to a limited company is more than a name amendment. CIS registration generally cannot be transferred between those business structures, so obtain the new company's UTR and registration number, create a distinct supplier record and verify the company before paying it. Do not carry forward the previous entity's verification number or deduction treatment.

This check answers who is being paid and which CIS deduction status applies. Questions about the required invoice fields, VAT treatment and domestic reverse charge sit within the wider UK CIS invoice requirements, not the verification response.

Act on HMRC's 0%, 20% or 30% result

Use the status returned for that subcontractor and keep the response with the payment record. The three outcomes are different payment instructions, not confidence scores:

HMRC result	Payment action
0%	The subcontractor has gross payment status. Make the payment without a CIS deduction.
20%	Apply the standard CIS deduction to the part of the payment subject to CIS.
30%	HMRC could not match the subcontractor for gross or standard-rate treatment. Apply the higher CIS deduction to the part of the payment subject to CIS.

Record the verification reference against the subcontractor before approving the invoice. When HMRC cannot match a subcontractor, the verification number contains a “V” marker. Preserve the reference exactly as returned rather than trying to construct it from a remembered pattern; the HMRC response is the evidence for both the unmatched result and the 30% treatment.

An unmatched result is not the same as a known subcontractor losing gross payment status. If HMRC later changes a verified subcontractor's deduction treatment, apply the notified rate to future payments from the effective point HMRC gives you. That change does not by itself mean the legal entity has become unmatched, nor does it create a need to submit repeated verification requests outside the return-history rule.

The verification result determines the rate, but it does not calculate the deduction base. Materials, VAT and the nature of the construction payment still need to be treated under the CIS payment rules. The separate guide to current CIS gross payment status rules covers the status regime and changes to eligibility without widening this pre-payment check.

---

Reconcile invoice names before bulk verification

Batch verification works better when invoice data is reconciled before anyone submits it to HMRC. Start with one row per invoice containing the supplier name as shown, the vendor legal name where present, the invoice reference and any usable entity identifier. Compare that sheet with the authorised subcontractor master and route differences to a person who can confirm the entity.

Invoice Data Extraction can extract invoice data into a structured spreadsheet in Excel, CSV or JSON. A prompt can request fields such as the trading name and vendor legal name across a mixed batch, while values that warrant checking can be marked as Review Needed. This creates a consistent comparison file; it does not turn the invoice into an authoritative CIS record.

The reconciliation should identify, for example:

• one trading name linked to two possible registered companies;
• a limited-company invoice still attached to the former sole-trader supplier record;
• spelling or entity-suffix differences that could cause an HMRC mismatch;
• invoices that do not contain the UTR or company registration number needed for verification.

Resolve those exceptions against approved onboarding records or with the subcontractor. Do not infer a missing UTR, company number or National Insurance number from other invoice fields. An authorised user then submits the confirmed master details through HMRC's online service or commercial CIS software.

Invoice Data Extraction does not verify subcontractors with HMRC, choose a deduction rate or replace the CIS master. Its role ends with converting the source invoices into consistent data for the pre-verification comparison. Where a batch contains more than 50 subcontractors requiring verification, the confirmed records must still go through commercial CIS software, as HMRC requires.

Keep the verification evidence with the CIS payment record

Save the HMRC response and verification reference against the same legal-entity record used to approve the payment. The audit trail should connect four things without relying on someone's memory: the details submitted, the date of verification, the rate HMRC returned and the invoice payment to which that rate was applied.

A practical record contains:

• the subcontractor's matched legal name and business type;
• the UTR and other matching identifiers held in the authorised master;
• the verification response and reference exactly as returned;
• the verification date and the user or process that submitted it;
• the invoice, gross payment amount, CIS deduction calculation and payment evidence.

HMRC requires contractors to retain the gross amount of each subcontractor payment excluding VAT and any CIS deductions made. Where a deduction was made, retain the material costs invoiced by the subcontractor excluding VAT as well. Keep those CIS records for at least three years after the end of the tax year they relate to.

HMRC does not require you to use a particular folder name or supplier-master field. What matters is that the records show why the payment was made gross or why 20% or 30% was deducted, and that the verification evidence can be matched to the correct entity and transaction.

The verified supplier identity, payment amount and deduction then feed the monthly reporting process. Use the invoice and payment records to prepare a CIS300 monthly return from invoices, keeping the verification-before-payment decision distinct from the later return submission.