Gross payment status means contractors pay you in full with no deduction, and you settle your tax through your return instead. For a subcontractor it transforms cash flow — instead of 20% of every payment sitting with HMRC until you reclaim it, you hold the money. To qualify you must pass three tests: a business test showing you run a genuine construction business through a bank account, a turnover test measured against thresholds that vary by structure, and a compliance test requiring that you have filed and paid everything on time in the last twelve months. The compliance test is the one that bites, and it applies continuously — HMRC reviews status annually and will withdraw it for a pattern of lateness. Losing it costs far more than the late return that triggered it.