Whether you would pass the turnover test as a sole trader, a partnership or a company — and a straight account of the compliance test, which is the one that actually fails applications.
Partners for a partnership. For a company, its directors and — in a close company — its beneficial shareholders. Use the maximum at any one time in the 12 months.
Excluding VAT and excluding the cost of materials. This is your labour, not your invoiced total.
Illustrative figures on 2026/27 rates and simplified assumptions. This is information, not advice, and it is no substitute for a proper calculation on your practice's real numbers. Ask us for the accurate version — it's free.
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Read this before you rely on the answer
Gross payment status turns on three tests in Schedule 11 to the Finance Act 2004, with the thresholds in regulation 28 of SI 2005/2045. This tool does the arithmetic on one of them.
The business test asks whether the business carries out construction work in the UK, or supplies labour for it, and whether it is run through a bank account. For a real trade business it is a formality.
The turnover test is what the tool calculates: relevant payments in the 12 months before the application, excluding VAT and the cost of materials, against £30,000 for a sole trader, £30,000 multiplied by the number of partners or relevant persons, or £100,000 in total as an alternative. Where the multiple threshold is used it takes the maximum number of relevant persons at any one time in those 12 months, not the number today.
The compliance test is the one that fails applications, and no calculator can evaluate it. Every tax obligation must have been met on time in the qualifying period, across CIS, PAYE, Self Assessment, corporation tax and — since 6 April 2024 — VAT. Minor VAT compliance failures do not cause refusal or removal, which was added following consultation. But a pattern of late VAT returns is now capable of costing you the status.
Because the benefit is not proportional to how comfortably you pass. Gross payment status stops 20% of your turnover being held back and recovered months or years later, and for a labour-only business the deduction base is close to the whole invoice. £30,000 net of VAT and materials is a low bar for a full-time trade.
What has changed is the downside. From 6 April 2026, where a business knew or should have known that payments it made or received were connected with the fraudulent evasion of tax, the status is cancelled immediately, the business becomes liable for the lost tax, a penalty of 30% of that lost tax is chargeable to the business and to its directors and other connected persons, and the bar on reapplying rises from one year to five. The first compliance review after an application now comes at six months rather than twelve.
Which is why the honest order of work is: check the turnover test here, then look properly at your filing record across all five tax types, and only then apply.
These tools use sensible simplifications. A free CIS review gets you the accurate version — and usually two or three things worth fixing before your year end.
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