HMRC has made the Income Tax (Construction Industry Scheme) (Amendment) Regulations 2026 (SI 2026/289), laid before the House of Commons on 13 March 2026 and in force from 6 April 2026. The instrument updates the Construction Industry Scheme in two areas: a targeted nil‑return duty for certain contractors and a new exclusion for payments made to public bodies.
Under new regulation 4(9A) of the 2005 Regulations, a contractor within section 59(1)(a) of the Finance Act 2004-whose business includes construction operations-must submit a monthly CIS return indicating that no payments were made to sub‑contractors for any tax month in which none were made. The return must be filed not later than 14 days after the end of the relevant tax month.
An exception in regulation 4(9B) removes the need to file a nil return if the contractor notifies HMRC that there will be no payments under construction contracts for the tax month in question. The notification must be received by HMRC no later than 14 days before the start of that tax month.
The nil‑return trigger applies only where the contractor has previously made contract payments, or payments that would have been contract payments but for section 60(4) of the Finance Act 2004. Businesses newly registered for CIS, or dormant contractors with no such history, fall outside this duty until activity begins.
For operational planning, the CIS tax month runs broadly from the 6th to the 5th. A nil return would therefore be due within 14 days of month‑end unless a valid advance notification was made at least 14 days before the month started. For example, to avoid a nil return for the tax month beginning 6 May 2026, a contractor would need to notify HMRC by 22 April 2026.
The instrument also inserts new regulation 23A. A payment under a construction contract is not a “contract payment” if it is made to a person within paragraphs (b) to (k) of section 59(1) of the Finance Act 2004. These paragraphs cover public bodies, for example government departments and local authorities, taking such outbound payments outside the CIS definition.
By excluding payments to public bodies from the definition of contract payments, the change confirms that CIS deductions and return entries should not be operated where the payee is an in‑scope public body. This sits alongside the existing regulation 23 on arrangements involving public bodies and clarifies the boundary between public procurement and CIS reporting.
The Regulations were signed by HMRC Commissioners Jonathan Athow and Daljit Rehal on 12 March 2026, laid on 13 March 2026, and take effect from 6 April 2026. HMRC has indicated that a Tax Information and Impact Note will be published on the GOV.UK TIINs collection.
Finance directors and CIS managers should either reinstate a controlled nil‑return process or adopt advance month‑by‑month notifications where no sub‑contractor payments are expected, and confirm that payments to in‑scope public bodies are excluded from CIS computations and returns from 6 April 2026.
All other CIS obligations remain unchanged. Sub‑contractor verification procedures and the operation of deductions on qualifying payments to non‑public‑body suppliers continue to apply under section 60 of the Finance Act 2004 and the 2005 Regulations as amended.