CIS changes from 6 April 2026

From 2015 to April 2026 you didn't have to file anything in a month when you paid no subbies. That changed on 6 April 2026. If your business does construction work and has paid subbies before, you now file a nil return by the 19th for any tax month with no payments.

You can skip it if you tell HMRC at least 14 days before the tax month starts that you won't pay any subbies in it. GOV.UK calls this making an inactivity request. A late nil return gets the same penalties as any other late return, starting at £100.

CIS nil returns covers who needs one and how to tell HMRC in advance.

Some public bodies do construction work for others, for example a council's own works department. Since 6 April 2026, a payment you make to one of them is not a CIS payment. The law covers these bodies:

• government departments, in Westminster and the devolved governments
• local councils
• development corporations and new town commissions
• housing associations, housing trusts and the Northern Ireland Housing Executive
• NHS trusts, and Health and Social Services trusts in Northern Ireland
• other public bodies named in the law, such as the Homes and Communities Agency and the Greater London Authority

HMRC's guide, CIS 340, says that when you pay one of these bodies you should not:

• verify them
• take a deduction from the payment
• put the payment on your monthly return

Before April, HMRC already treated some of these bodies as if they were paid gross, under a concession. The new rule puts that into law. A private business that spends over £3 million a year on construction is not covered by it, so it stays in CIS.

If you are paid gross yourself, HMRC can now cancel your gross payment status straight away. It can do this when it finds you knew, or should have known, about deliberate CIS or PAYE failures in your supply chain.

After a cancellation like that, or one for fraud, false information or knowingly breaking the CIS rules, you can't apply for gross payment again for 5 years. Before April the wait was 1 year in every case. The 5 years applies where that behaviour happened on or after 6 April 2026. After any other cancellation, such as late returns, the wait is still 1 year.

To check whether you meet the tests for gross payment, use the CIS gross payment status checker.

HMRC can now make you pay 20% of what you paid a subbie. That happens if, before you paid, you knew or should have known that someone on the same job was cheating. Cheating here means deliberately not taking CIS deductions, not paying them over, or not running PAYE. HMRC can add a penalty of up to 30% of that amount on top. The warning signs HMRC looks for are in CIS late filing penalties.

This is not a CIS change, but it reaches contractors who are sole traders. Making Tax Digital for Income Tax means keeping digital records, sending HMRC an update every quarter and filing your tax return from software. It started on 6 April 2026 for sole traders and landlords whose income was over £50,000 in the 2024 to 2025 tax year.

The figure HMRC uses is your total income from self-employment and property before expenses, so your turnover, not your profit. The limit falls to £30,000 from 6 April 2027, based on 2025 to 2026, and to £20,000 from 6 April 2028, based on 2026 to 2027. Partnerships will come in later, and GOV.UK gives no date yet.

• In any month you won't pay subbies, tell HMRC at least 14 days before it starts, or file a nil return by the 19th. Every date is in CIS deadlines.
• If you pay a council or other public body for construction work, don't verify them, take no deduction and leave the payment off your return.
• Check who you pay before you pay them, and keep a note of what you checked and when.
• If you are paid gross, keep your own CIS returns and payments on time, because late ones give HMRC grounds to cancel it.
• If you are a sole trader, check your turnover against the Making Tax Digital limits.
• If a return is already late, see what it costs with the CIS penalty calculator.