HMRC has set secondary legislation to adjust the Construction Industry Scheme (CIS) from 6 April 2026. The Income Tax (Construction Industry Scheme) (Amendment) Regulations 2026 amend the 2005 CIS Regulations and introduce a targeted nil‑return duty and an exemption for payments made to public bodies. (gov.uk)
Under the new rules, contractors whose business includes construction operations (section 59(1)(a) of the Finance Act 2004) and who have previously made CIS contract payments must submit a monthly CIS300 for any tax month in which no such payments are made, unless they notify HMRC at least 14 days before the start of that tax month that no payments will be made. (gov.uk)
On timing, CIS returns are due 14 days after the end of the tax month. In practice, tax months run from the 6th to the 5th and the filing deadline is the 19th of the following month. For the first period under the new rules (6 April to 5 May 2026), by calculation under the 14‑day rule a contractor expecting no subcontractor payments can either pre‑notify HMRC by 23 March 2026, or file a nil return by 19 May 2026. (gov.uk)
Non‑compliance carries familiar risks. The explanatory note updates cross‑references so that failing to file a required nil return falls within the existing penalty framework. HMRC guidance confirms that a CIS300 received after the 19th is late and will trigger an automatic £100 fixed penalty, with further penalties if failure persists. (gov.uk)
Scope is also adjusted for outbound payments. A payment made under a construction contract to any public body listed in paragraphs (b) to (k) of section 59(1) FA 2004 is not a contract payment for CIS purposes; contractors therefore do not verify such payees or make CIS deductions on those payments. (gov.uk)
HMRC’s manual lists examples including government departments, the Corporate Officers of both Houses of Parliament, local authorities, specified housing bodies and NHS trusts. This change concerns payments to those bodies; it does not alter CIS obligations on payments made by them to subcontractors when they are within scope as contractors, typically where construction expenditure exceeds £3 million in any rolling year under section 59(2). (gov.uk)
The nil‑return duty is narrow by design. It applies to mainstream contractors under section 59(1)(a). Deemed contractors brought into the scheme by expenditure levels under section 59(1)(l), and public bodies, are not named in the new nil‑return rule but remain required to submit returns for months in which they do make payments to subcontractors. (gov.uk)
Finance leads should now secure controls. Calendar the 19th‑of‑month filing point for both standard and nil returns; put in place an internal check to decide, ahead of each tax month, whether pre‑notification is appropriate; and update supplier records so that public bodies receiving payments under construction contracts are correctly flagged to avoid unnecessary CIS verification or deductions.
HMRC states that a Tax Information and Impact Note will be published on GOV.UK. Organisations should monitor official pages and manuals for any implementation guidance before 6 April 2026, and brief payroll, finance and project teams on the revised monthly process. (gov.uk)