Stuck on 30% CIS Deduction? Here's How to Fix It
Why Are You on 30%?
The 30% CIS deduction rate applies when HMRC cannot verify your registration. This usually happens because:
- You are not registered for CIS — the most common reason
- Your details do not match — the information your contractor gave HMRC does not match their records
- Your registration has lapsed — you were registered before but it was cancelled
Whatever the cause, 30% deductions are significantly more than most subcontractors owe in tax, creating an unnecessary cash flow drain.
How to Fix It
Step 1: Check If You Are Registered
Log in to your HMRC online account or call the CIS helpline on 0300 200 3210. Confirm your current CIS registration status.
Step 2: Register If Needed
If you are not registered, do so immediately:
- Online through the Government Gateway
- By phone via the CIS helpline
You need your UTR and National Insurance number. If you do not have a UTR, register for Self Assessment first (this takes up to 10 working days).
Step 3: Check Your Details
If you are registered but still getting 30% deductions, the problem is likely a mismatch between your details and what the contractor is providing to HMRC. Check:
- Is the contractor using your legal name (not a nickname or trading name)?
- Is your UTR correct and not confused with another business?
- Is your National Insurance number exactly right?
Contact HMRC to confirm what they hold and update anything that is incorrect.
Step 4: Ask Your Contractor to Re-Verify
Once your registration is sorted, tell your contractor to re-verify you with HMRC. They should get a "net payment" (20%) result instead of "unmatched" (30%).
Step 5: Consider Gross Payment Status
If you meet the criteria (£30,000+ turnover, clean compliance record), apply for Gross Payment Status and eliminate deductions entirely.
How Long Does It Take?
- New registration: confirmed within a few days
- Re-verification: immediate (the contractor can verify you online in minutes)
- Gross Payment Status application: up to 6 weeks
Can You Reclaim the Excess?
Yes. Any CIS deductions — including the extra 10% from being on 30% — are credited against your tax bill when you file Self Assessment. If you have overpaid, you receive a refund.
But waiting for a refund is not ideal. Fix the problem now and keep your cash flow healthy going forward.
Track your CIS deductions and refund position with Accounted — Penny shows you exactly how much you are owed.
Do not lose 30% of every payment. Sign up for Accounted and get your CIS rate sorted with Penny's help.
Tax & Compliance Specialists
Our tax specialists have decades of combined experience in UK sole trader and small business taxation, MTD compliance, and HMRC submissions. All content is reviewed against current HMRC guidance before publication and updated quarterly to reflect legislative changes.
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