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HMRC internal manual

Construction Industry Scheme Reform Manual

HM Revenue & Customs
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Verify subcontractor: overview: When do contractors first need to verify


CISR51600 Action guide contents



Before making a first payment to a subcontractor the contractor must confirm that the subcontractor is registered with CIS and obtain details of their payment status. Whilst this may be done using a number of different channels, this information must be obtained by direct contact with HMRC by the contractor or the contractor’s appropriate representative acting on their behalf, and is known as ‘verifying the subcontractor’.

Before taking any action to contact HMRC, the contractor must first be satisfied that the contract between the contractor and the subcontractor is one of self-employment. Contractors may obtain advice on employment status matters by contacting their local HMRC office, or by using the Employment Status Indicator (ESI) tool available on the HMRC internet site at:

Having once verified a subcontractor with HMRC, the contractor may continue to pay the subcontractor without further verification, as long as the previous payment to the subcontractor was made in

  • the current tax year


  • the two previous tax years.

Otherwise the contractor must contact HMRC using their preferred channel, to re-verify the subcontractor and obtain details of their current payment status.

Following verification of the subcontractor HMRC will keep the contractor(s) informed of any change in the subcontractor’s payment status by the issue of form(s) CIS316A.This will include all contractors who have made payments to the subcontractor in the year of change and the two previous tax years.

Note: Whilst HMRC will keep known contractors informed about changes inpayment status of their current and past subcontractors, it must be remembered that the receipt of a CIS316A or C316B merely confirms a subcontractor’s current payment status.Whether or not the contractor needs to verify a subcontractor with HMRC depends upon the time that has passed since the last payment (See above) and not when the contractor last received a CIS316A or CIS316B.

Transitional arrangements for verification

To avoid contractors having to verify all of their existing subcontractors in the runup to the new scheme starting on 6 April 2007, HMRC will carry over the majority of contractor and subcontractor records from the old to the new computer system, on their current payment basis in force on 5 April 2007. This will mean that subcontractors who have been registered under the old scheme, and are working in the construction industry up to the 5 April 2007, will not have to re-register for the new scheme.

To help facilitate this, Contractors will be provided with a list of subcontractors in March 2007 on form CIS333A of those subcontractors who have been paid since 6 April 2005, and whose current CIS documentations remain in force on 6 April 2007. The CIS333A will show the name and Unique Taxpayer Reference (UTR) for the subcontractor and their payment status under CIS.

Who do contractors not need to verify in the first year of the new scheme (2007-2008)?

Contractors do not need to verify a subcontractor if they

  • have already included them on any monthly return in that year (2007-2008)


  • have paid them since 5 April 2005 and at the time of payment the contractor had seen

    • a tax certificate (CIS6 or CIS5), with an expiry date later than 03/2007
    • a Registration Card (CIS4(P))
    • a temporary Registration Card (CIS4(T)), with an expiry date later than 03/2007.

Otherwise, the contractor must contact HMRC using their preferred channel and verify the payment status of the subcontractor.