CIS Verification: How to Check a Subcontractor

Why Verification Is Required

Under CIS, contractors must verify every new subcontractor with HMRC before making their first payment. Verification tells you which deduction rate to apply — 0%, 20%, or 30%. Without verification, you risk applying the wrong rate and facing penalties from HMRC.

Verification is not a one-off check for the lifetime of your relationship. You need to verify a subcontractor again if you have not included them on a CIS return for the current or previous two tax years.

How to Verify a Subcontractor

What You Need

To verify a subcontractor, you will need:

• Their legal name — for sole traders, this is their personal name. For companies, the registered company name
• Their UTR — Unique Taxpayer Reference
• Their National Insurance number (sole traders) or Companies House registration number (limited companies)

Online Verification

The fastest method is through HMRC's online CIS service:

1. Log in to your HMRC online account
2. Navigate to the CIS section
3. Select 'Verify a subcontractor'
4. Enter the subcontractor's details
5. HMRC will return a verification result immediately

You receive a verification reference number, which you should record for your files.

Phone Verification

You can also verify by calling the CIS helpline on 0300 200 3210. Have all the subcontractor's details ready before you call. The helpline operative will verify the subcontractor and give you the result during the call.

Understanding Verification Results

HMRC will return one of three results:

Matched — Gross (0%)

The subcontractor has Gross Payment Status. You should pay them the full amount with no deductions. You still need to include them on your monthly CIS return.

Matched — Net (20%)

The subcontractor is registered for CIS at the standard rate. Deduct 20% from the labour element of the payment.

Unmatched (30%)

HMRC could not match the details provided. The subcontractor may not be registered, or the details may be incorrect. You must apply the higher 30% deduction rate.

If you get an unmatched result, inform the subcontractor. They may need to:

• Register for CIS if they have not already
• Check that their details with HMRC are correct
• Provide you with the correct UTR or National Insurance number

You can re-verify once the subcontractor has sorted out their details. In the meantime, you must apply 30% to any payments.

When to Re-Verify

You must verify a subcontractor again if:

• They have not been included on any of your CIS returns in the current or previous two tax years
• Their details have changed (name, company structure)
• You have reason to believe their CIS status has changed

You do not need to re-verify every month if you are regularly paying and reporting the same subcontractors.

Record Keeping

For each verification, keep a record of:

• The subcontractor's details (name, UTR, NI number or company number)
• The date of verification
• The verification reference number
• The result (gross, net, or unmatched)

These records should be kept for at least six years and will be needed if HMRC queries your CIS returns.

Common Verification Issues

Incorrect Details from Subcontractors

The most common cause of unmatched results is incorrect details. Subcontractors sometimes provide an old UTR, a wrong National Insurance number, or a trading name instead of their legal name. Always ask for their exact legal name as registered with HMRC.

Recently Registered Subcontractors

If a subcontractor has only just registered for CIS, there may be a short delay before HMRC's system recognises them. If you get an unmatched result for a newly registered subcontractor, try again after a few days.

Company Name Changes

If a limited company has changed its name since registering for CIS, the verification may fail if the old name is used. The subcontractor should confirm their current Companies House name.

What Happens If You Skip Verification?

If you pay a subcontractor without verifying them and apply the wrong deduction rate, HMRC can hold you liable for the difference. For example, if you pay a subcontractor at 20% but they should have been at 30% (because they are unregistered), you could owe HMRC the additional 10%.

Verification protects you as a contractor. It proves that you followed the correct process and applied the rate HMRC instructed.

How Accounted Helps with Verification

Accounted keeps track of your subcontractor verification status:

• Verification reminders — Penny alerts you when a subcontractor needs re-verification
• Record storage — verification dates, reference numbers, and results stored against each subcontractor
• Deduction rate tracking — the correct rate is automatically applied based on the most recent verification

See our pricing plans for contractor features.

---

Stay compliant with every subcontractor payment. Sign up for Accounted and let Penny manage your CIS verification records.