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CIS Changes 2026/27: What Contractors Need to Know

3rd of June, 2026

 

CIS Changes 2026/2027

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CIS Changes 2026/27: What Contractors Need to Know

Significant changes to the Construction Industry Scheme (CIS) took effect from 6 April 2026, increasing compliance requirements for contractors and strengthening HMRC's anti-fraud measures.

Mandatory CIS Returns Are Back

One of the most important changes is the reintroduction of compulsory monthly CIS returns, even where no subcontractors have been paid during the tax month.

Contractors must now either:

  • Submit a monthly CIS return, including nil returns where applicable; or
  • Notify HMRC in advance of periods of inactivity.

Failure to comply may result in automatic penalties being issued.

Full Penalty Regime Reinstated

Alongside the return of mandatory nil returns, HMRC has reinstated the full CIS late-filing penalty structure:

  • £100 for missing the filing deadline
  • Additional £200 after two months
  • Further penalties after six and twelve months for continued non-compliance

Contractors should ensure robust processes are in place to avoid unnecessary penalties.

New Anti-Fraud Measures

HMRC has introduced tougher anti-fraud rules targeting tax evasion within construction supply chains.

Businesses may face financial penalties where they knew, or should reasonably have known, that parties within their supply chain were involved in CIS or PAYE non-compliance.

This places greater emphasis on contractor due diligence and supply chain checks.

Public Sector Payments Exempt from CIS

From April 2026, payments made to certain local authorities and public sector bodies are exempt from CIS, reducing administration and reporting requirements for qualifying contracts.

How We Can Help

Our experienced payroll and CIS specialists can help contractors remain compliant with the latest legislation, manage monthly submissions, verify subcontractors, and avoid costly penalties.

If you would like advice on the 2026/27 CIS changes, please contact our team today.