08/04/2026
Must-Know for Construction Firms: New CIS Rules 🚧
As of April 6, 2026, HMRC has new rules to combat supply chain fraud in the Construction Industry Scheme. 👷♀️👷♂️
Key Points:
- HMRC can now take away a firm's Gross Payment Status (GPS) if they "knew or should have known" about fraud in their supply chain.
- Losing GPS means subcontractors can't receive full payments without tax deductions, impacting cash flow. Reapplying for GPS now takes five years instead of one.
- Company directors involved in fraud may face personal penalties, and contractors could lose their GPS for five years, with penalties up to 30% of the tax evaded.
- This builds on previous VAT measures and is expected to raise £205 million in its first year.
Bottom Line: Construction firms must ensure compliance, thorough due diligence, and keep excellent records. Don't ignore red flags - be proactive.
Under the new Construction Industry Scheme, firms must spot supply chain fraud or risk losing their Gross Payment Status