
HMRC's powers over the Construction Industry Scheme are changing significantly from 6 April.
Under the Finance Bill 2026, HMRC can remove Gross Payment Status with immediate effect where a business is found to be connected to fraudulent CIS activity (Finance Bill 2026; Rouse Partners). The reapplication ban extends to five years (currently one year). Financial penalties can reach 30% of the full tax loss. And nil returns are reinstated: monthly submissions required even when no subcontractor payments have been made.
The "should have known" standard in the legislation is the key phrase. Ignorance of a subcontractor's GPS status isn't a defence. It's evidence of inadequate due diligence.
For construction firms and CIS contractors, the time to act is before 6 April. GPS verification, documented supplier checks, a proper audit trail: these are the things that matter when HMRC investigates.
#FCSA #CIS #ConstructionIndustryScheme #HMRC #Compliance #Contractors

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