What should I check when vetting a contractor?

Check: company status at Companies House (active, not in liquidation or being struck off), latest filed accounts (net assets, turnover trend, going concern warnings), director track record (prior insolvencies, disqualifications, phoenix patterns), CCJs registered against the company, and whether appropriate insurance is in place. A £29 Quick Check covers the first four instantly.

Why does contractor due diligence matter for main contractors?

Under CIS (Construction Industry Scheme), HMRC can hold main contractors jointly liable for subcontractor tax obligations. Beyond tax, if a subcontractor goes bust mid-project, you inherit the delay, the cost of re-procurement, potential defects liability, and reputational damage with your client. Prevention is cheaper than cure.

How do I check a contractor company for free?

Companies House provides basic information for free: company status, filing history, director names, and confirmation statement dates. However, it does not show CCJs, charges detail, cross-referencing with other companies the directors run, or insolvency patterns. For those deeper checks, you need a commercial service.

What are the red flags when vetting a subcontractor?

Key red flags: accounts more than 30 days overdue at Companies House, net liabilities on the balance sheet, directors with prior company insolvencies (especially in the same sector), company incorporated less than 12 months ago taking on large contracts, no visible employer liability insurance, and confirmation statement overdue (suggests the company is being neglected or abandoned).

Should I check contractors every time or just at onboarding?

Both. Run a full check at onboarding, then monitor continuously. A company that was healthy when you onboarded them 18 months ago may now be filing late, accumulating CCJs, or showing signs of distress. Continuous monitoring (from £19.99/mo) alerts you to changes so you can act before the contractor fails mid-project.

What is CIS and how does it affect contractor vetting?

CIS (Construction Industry Scheme) requires main contractors to deduct tax from subcontractor payments and pay it to HMRC. If a subcontractor is not registered for CIS, you must deduct 30% (instead of 20%). If you fail to make deductions or verify registration, HMRC can hold you liable for the missing tax. Vetting includes verifying CIS registration status.

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Supply Chain

Contractor Due Diligence: Vet Before You Engage

A subcontractor that goes bust mid-project costs you more than the contract value. Check company health, director history, and insolvency patterns before you sign the order. Instant checks from £29.

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Enter the company name or number. See financial health, director track record, CCJs, and insolvency risk instantly.

Why contractor due diligence matters

Joint liability (CIS). HMRC can hold main contractors liable for subcontractor tax if you fail to verify registration or make correct deductions. A company that is not CIS-registered requires 30% deduction.

Supply chain failure. If a subcontractor enters insolvency mid-project, you bear the cost of delay, re-procurement, and potential defects. On a £500K project, a failed sub can cost £50K to £150K in programme delays alone.

Reputational risk. Your client holds you responsible for your supply chain. A subcontractor with safety violations, environmental breaches, or modern slavery issues becomes your problem on the front page.

Insurance validity. Many professional indemnity and contractor all-risks policies require you to verify subcontractor competence and financial standing. Failure to vet can void your own cover.

What to check

Company status: active, not in liquidation, not being struck off, confirmation statement current
Accounts: filed on time, net assets positive, turnover stable or growing, no going concern warning
Director track record: no prior insolvencies in same sector, no disqualifications, no phoenix patterns
CCJs: no county court judgments registered (indicates unpaid debts to other creditors)
Insolvency history: no winding-up petitions, no administration, no CVA in the last 3 years
Insurance: employer liability (legal requirement), public liability, professional indemnity where relevant
CIS registration: verified with HMRC for construction subcontractors

Red flags that should stop you engaging

Accounts overdue

Filing more than 30 days late at Companies House. Suggests cash problems, management distraction, or a company being wound down. Penalty escalates from £150 to £1,500.

Net liabilities

Company owes more than it owns. Technically insolvent on a balance sheet test. Any significant contract could push it into formal insolvency.

Director with prior insolvencies

Same person, same sector, company failed before. Pattern indicates the business model or management is the problem, not bad luck.

Newly incorporated, large contract

Company less than 12 months old taking on work disproportionate to its balance sheet. No track record, no financial cushion, high failure risk.

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Who needs contractor due diligence

Main contractor vetting subcontractors

Large construction project with 20+ subcontractors. One failure cascades into programme delay, liquidated damages, and client relationship damage. Check all subs before they start on site.

FM company onboarding service providers

Facilities management with cleaning, security, and maintenance subcontractors across multiple sites. A failed provider means emergency re-procurement and SLA breaches with the end client.

Developer checking consultants

Property developer engaging structural engineers, architects, and quantity surveyors. If a consultant company folds, their PI insurance may lapse, leaving you exposed on latent defects for years.

IT company vetting dev agencies

Software company outsourcing to a development agency. Code delivered by a company that later dissolves means no warranty claims, no bug fixes, and no IP chain of title clarity.

Check a contractor in 30 seconds.

Quick Check (£29): instant company status, director history, CCJs, insolvency signals. Forensic Report (£167): full investigation across 72 risk signals from 12 UK data sources, including phoenix patterns, network analysis, and director conduct scoring.

Check a contractor Full investigation (£167)

Monitor your supply chain continuously

A one-off check tells you the position today. Monitoring (Pro plan, £149/mo) alerts you within 24 hours when any contractor in your portfolio files late, receives a CCJ, has a gazette notice published, or shows signs of distress. Available via the web dashboard or the Microsoft 365 Trust Check app (per-seat for teams). RecoupIQ is a Microsoft partner.

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Related guides

Last reviewed: July 2026. General information for UK businesses. Not legal or financial advice. RecoupIQ Ltd, Company No. 16947526, ICO ZC077511. Microsoft Partner.