The construction industry is traditionally regarded as having serious compliance issues. The changes introduced from 6 April 2024 suggest that HMRC remain focused in their compliance approach regarding the construction industry arena.

The Autumn Budget provided further proof that the Government were serious about tackling non- compliance by pledging additional resources for HMRC to recruit 5,000 compliance officers. We are also aware of HMRC sending out ‘nudge letters’ pointing out the risks of failing to operate CIS correctly.

The onus is on contractors to operate the CIS correctly, yet errors are commonplace. They can prove costly, especially if a subcontractor does not have gross payment status (‘GPS’) (i.e. no CIS tax deduction), since the contractor is liable for the additional tax due, including any interest and penalties that may be levied by HMRC.

With this in mind, we thought it would be beneficial to provide a brief overview of CIS, why it was introduced, how it has evolved over the years, recent changes and common mistakes contractors make when operating or not operating CIS.

Read the full factsheet here.