How to activate your UTR under the CIS scheme

If you work in construction and get paid as a self-employed person or subcontractor, you’ve probably heard of the Construction Industry Scheme (CIS). It’s how HMRC makes sure the right amount of tax is taken from payments between contractors and subcontractors.
To be paid correctly, you’ll need something called a UTR (Unique Taxpayer Reference) and you’ll also need to activate it for the the CIS.

Continue reading for a step by step guide:

What’s a UTR?

Your UTR is a 10-digit number that HMRC gives you when you register as self-employed. Think of it as your personal tax number. You’ll use it whenever you file a tax return or deal with HMRC. If you want to work under the CIS scheme, this number needs to be linked to your CIS registration.

What’s the CIS Scheme?

The Construction Industry Scheme is how tax is collected in the construction industry.

Here’s the basic idea:

• Contractors deduct tax from the payments they make to subcontractors.
• If you’re registered under CIS, the deduction is 20%.
• If you’re not registered, the deduction jumps to 30%.

How to Activate Your UTR Under CIS

• Step 1: Get Your UTR

If you don’t already have a UTR, you’ll need to register for self assessment first. You can do this online at gov.uk/register-for-self-assessment. Once you’ve signed up, HMRC will send your UTR by post, which usually takes about 10 working days.

• Step 2: Register for the CIS Scheme

When your UTR arrives, it’s time to register for CIS. You can do this online through your Government Gateway account, or by calling HMRC on 0300 200 3210:

You’ll need to have a few details ready:

• Your UTR number
• National Insurance number
• Business name and type (e.g. sole trader or partnership)
• Your business address

• Step 3: Wait for Confirmation

After you’ve registered, HMRC will process your details and activate your UTR under the CIS scheme. This usually takes a few days but once it’s done, you’ll get a confirmation that you’re officially registered as a CIS subcontractor.

• Step 4: Tell Your Contractor

Once you’re set up, give your UTR to your contractor. They’ll check it with HMRC and make sure you’re verified under CIS. After that, they’ll only take 20% tax from your pay instead of 30%.

Common Mistakes to Avoid

• Skipping self assessment: You need a UTR before you can register for CIS.
• Typos or wrong details: Small errors can slow things down.
• Not telling your contractor: If they can’t verify you, they’ll deduct 30% automatically.

Key Takeaways

Getting your UTR activated under the CIS scheme is an easy but important step if you work in construction. Once it’s done, you’ll be registered correctly, paid the right amount and avoid higher tax deductions.

For any extra help or advice reach out to the team at Cavendish Professionals on contracts@cavendishprofessionals.com.