What are the Construction Industry Scheme requirements from April 2026?

Construction businesses should be aware of an important change to the Construction Industry Scheme (CIS) that came into effect on 6 April 2026. Contractors who do not make payments to subcontractors during a tax month are once again required to submit a CIS nil return or notify HMRC in advance that no return is due.

Understanding these requirements is essential for remaining compliant, avoiding unnecessary penalties and ensuring your business meets its ongoing CIS obligations.

What is the Construction Industry Scheme (CIS)?

The Construction Industry Scheme (CIS) is a HMRC tax scheme that governs payments made by contractors to subcontractors for construction work carried out in the UK.

Under the scheme, contractors deduct tax from payments made to subcontractors and pay these deductions directly to HMRC. These deductions are treated as advance payments towards the subcontractor’s Income Tax and National Insurance liabilities.

For businesses operating in the construction sector, complying with CIS requirements is an important part of effective financial management and tax compliance.

CIS nil returns are now required again

From 6 April 2026, contractors must submit a nil monthly return for any tax month in which they have not paid subcontractors.

Alternatively, contractors can notify HMRC in advance if they know they will not be making subcontractor payments for a period of time.

This requirement has been reintroduced to help prevent contractors from receiving automatic late filing penalties when no payments have been made. Failure to submit a nil return or notify HMRC, without a reasonable excuse, may result in penalties.

Who needs to register for CIS?

Whether your business is based in the UK or overseas, you may need to register for the Construction Industry Scheme if you carry out or commission construction work in the UK.

Contractors

You must register as a contractor if you:
• Pay subcontractors to carry out construction work; or
• Are not a construction business but have spent more than £3 million on construction within the 12 months following your first construction payment.

Registered contractors can use HMRC’s CIS online service to verify subcontractors and submit their monthly CIS returns.

Subcontractors

If your business carries out construction work for contractors, you should register as a subcontractor.

Although registration is not compulsory, subcontractors who are not registered are subject to a higher rate of CIS deductions, which can have a significant impact on cash flow.

If your business acts as both a contractor and a subcontractor, you must register in both capacities.

Staying compliant with CIS

Keeping up to date with your Construction Industry Scheme obligations helps reduce the risk of penalties and supports efficient business operations. Accurate registration, correct deduction rates and timely monthly submissions all play an important role in remaining compliant with HMRC.

If you are unsure whether your business should be registered under CIS, or need assistance with monthly CIS returns, our construction specialists can help you understand your obligations and ensure your business remains compliant.

Click here to download your free CIS updates brochure.