From 6th April 2026, contractors will be required by law to file a CIS return monthly or submit an inactivity request in advance to HMRC.
As outlined in the government’s Autumn Budget 2025 announcement, to simplify certain administrative aspects of the scheme and reduce avoidable errors, all contractors operating under the Construction Industry Scheme (CIS) will once again be required to either:
- File a CIS return every month, including nil returns in months where they have not used a subcontractor
- Inform HMRC in advance that they will not pay subcontractors that month by submitting an inactivity request
Why the change?
In 2015, the requirement to file nil returns was removed, with the aim of decreasing this burden on businesses. In its place, contractors were expected to advise HMRC of upcoming periods of inactivity or voluntarily file nil returns. There were issues with this in that many contractors received multiple, escalating late filing penalties because they failed to inform HMRC that they were not paying subcontractors. The appeal process was lengthy and difficult for both contractors and HMRC. To address this, HMRC suspended CIS late filing penalties other than the first fixed penalty of £100.
What’s happening now?
To ensure compliance, from 6th April 2026, the nil filing requirement will be back in place, and the full CIS late filing penalty regime will be reinstated.
It is to be noted that in addition to the first £100 fixed penalty, late filers may subsequently be charged:
- A second fixed penalty of £200 after 2 months
- A tax-geared penalty at 6 months of a minimum of £300 or 5% of any liability which should have been shown on the return
- A further tax-geared penalty at 12 months — the amount of this penalty will depend on why the return was late
Filing nil returns
Those CIS contractors who have continued to file nil returns where required will not experience any changes.
The obligation to file a nil return will mean penalties will only be issued in those cases where contractors have not advised HMRC in advance of a period of inactivity or filed a return.
The information provided in this blog is for general informational purposes only and should not be considered professional advice. As far as we are aware, the content is accurate at time of publication. Torgersens assumes no responsibility for errors or omissions in the content or for any actions taken based on the information provided.
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