Everything you need to verify a subcontractor with HMRC before you pay them, from the details to collect to what to do when they come back unmatched.
Checked against GOV.UK and HMRC’s CIS manual on 23 October 2026
Before you pay a new subcontractor under the Construction Industry Scheme, you must verify them with HMRC. HMRC then tells you whether they are registered for CIS and how much tax to deduct from their payments.
It is one of the simplest jobs in CIS, and one of the easiest to get slightly wrong. This guide walks through it in seven steps, from the details you need to collect to what to do when a subcontractor comes back unmatched. If you want to know what a result does and does not confirm, our guide to what CIS verification actually checks goes into that in more depth.
You must verify a subcontractor before the first payment if they are new to you. You must also verify someone you have used before if they have not been on one of your CIS returns in the current tax year or the last two.
If they have been on a return in that window, you do not need to verify them again. You carry on using the rate HMRC last gave you, for as long as payments continue, unless HMRC tells you otherwise.
A common belief is that every subcontractor has to be verified again each April. That is not what HMRC’s guidance says. A new tax year does not on its own mean a fresh verification.
Two other checks sit alongside verification. HMRC’s guidance expects a tender, a signed contract or a work order to be in place before you pay. You should also check whether the person ought to be your employee rather than a subcontractor. Verification answers neither question.
HMRC needs to know who is asking before it tells you anything about a subcontractor. Have these to hand before you start.
If your business runs more than one contractor scheme, for example one for each division, any division can rely on a verification another division has obtained. Each division’s payments still go on its own monthly return.
What you need depends on how the subcontractor trades.
| Subcontractor | Details HMRC needs |
|---|---|
| Sole trader | Name or trading name known to HMRC, UTR and National Insurance number |
| Limited company | Company name, the company’s own UTR and its company registration number |
| Partnership | Trading name, partnership UTR and the nominated partner’s details |
The details must exactly match the ones the subcontractor used to register with HMRC. HMRC will not accept a temporary National Insurance number, which starts with TN or with two digits.
Worth knowing. An easy slip to make with limited companies is giving the director’s personal UTR instead of the company’s. They are different numbers, and the wrong one will not match.
There are two ways to verify.
If you need to verify more than 50 subcontractors, HMRC says you will need commercial software.
Whichever route you use, verification gives you a deduction rate and nothing more. It will not check the business behind the name, which is where the rest of this guide comes in.
You do not have to do it yourself. An agent, a payroll bureau or a member of your own team can verify on your behalf, as long as they have the information HMRC asks for to confirm they are acting for your business.
HMRC checks the details against its records and gives you one of three results.
The subcontractor holds Gross Payment Status. Pay them without any CIS deduction.
The subcontractor is registered. Deduct 20% at the standard rate.
HMRC could not match the details. Deduct 30% at the higher rate.
The deduction does not come off the whole invoice. You first take away VAT, materials the subcontractor paid for and certain other costs, such as plant hired for the job, and deduct from what is left. HMRC lists them in its guide to making deductions.
A successful verification comes with a verification reference made up of a V and ten digits, for example V1234567890. If you verify several subcontractors in one go, they share the same reference. An unmatched result gets its own reference with a suffix on the end, for example V1234567890/A.
Keep the number with the subcontractor’s record, along with the date, the rate and the details you verified against. HMRC asks you to keep CIS records for at least three years after the end of the tax year they relate to.
From my time at HMRC, this number is one of the first things an officer will look for if your deductions are ever questioned. It shows you checked before you paid.
Daniel Lusted, Co-Founder, Tax Radar
Use the rate HMRC gave you on every payment to that subcontractor. If you make a deduction, give them a payment and deduction statement within 14 days of the end of the tax month.
If a subcontractor’s status changes, HMRC writes to the contractors who have paid or verified them in the current or previous two tax years. That can happen when an unmatched subcontractor registers, or when a subcontractor loses Gross Payment Status. Switch to the new rate from the point HMRC gives you.
An unmatched result means HMRC could not find a CIS record that fits the details you gave. You can still pay the subcontractor, but only with 30% deducted at the higher rate.
Check the details before anything else. The usual causes are a name that is not exactly as HMRC holds it, a director’s personal UTR given for a company, a temporary National Insurance number, or a subcontractor who has simply not registered for CIS.
If the details were wrong, correct them and verify again. If the subcontractor is not registered, give them the unmatched verification number and ask them to contact HMRC. Once they are registered, HMRC will tell you their new status and you can move to the new rate.
Verification was built to answer one question, which is how much tax to deduct. It answers that well. It was never designed to tell you whether the business you are paying is what it says it is.
Since 6 April 2026 that gap matters more. Under section 62A of the Finance Act 2004, inserted by the Finance Act 2026, HMRC can make a contractor pay 20% of a payment where it knew or should have known that another party to the contract, or to another contract for the same work, was deliberately failing to deduct or pay CIS or PAYE. Penalties of up to 30% of that amount can follow, and HMRC can transfer some or all of a penalty to company officers, including directors.
Our guide to the April 2026 CIS changes sets out the rules, and the case law behind the test explains how it is likely to be applied.
A clean verification is where every good check starts, which is why we call it the first piece of the puzzle. The questions that follow are whether you are doing the right checks, and whether you are doing them often enough.
CIS Defence verifies through your own HMRC connection, runs the checks again every 30 days and records each result alongside the checks verification does not cover.
No. You only need to verify again if the subcontractor has not been on one of your CIS returns in the current tax year or the last two. Otherwise you keep using the rate HMRC last gave you, unless HMRC tells you it has changed.
HMRC says that if you need to verify more than 50 subcontractors, you will need commercial CIS software.
You can still pay them, but you must deduct 30% at the higher rate. Check the details you entered first. If the subcontractor is not registered, give them the unmatched verification number and ask them to contact HMRC. HMRC will tell you when their status changes.
Yes. An agent, a payroll bureau or a member of your team can verify on your behalf, as long as they have the information HMRC needs to confirm they are acting for your business.
Yes. The company is a separate business with its own UTR and company registration number, and it has not been on your CIS returns before. Verify it before you make its first payment.
No. It confirms the subcontractor is registered for CIS and tells you how much to deduct. It says nothing about whether the business is genuine, whether its VAT is in order or whether anything changes after you checked. Our guide to what CIS verification actually checks covers this in more detail.
Checked against HMRC guidance on 23 October 2026.
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