Question 1

What is the CIS 'knew or should have known' rule?

Accepted Answer

From 6 April 2026, HMRC can hold contractors liable for lost tax if they knew or should have known that fraud was occurring in their supply chain. This is based on sections 62A–62B of the Finance Act 2004 as amended by the Finance Act 2026.

Question 2

Do I need to file a nil return every month from April 2026?

Accepted Answer

Yes. From 6 April 2026, contractors must file a monthly CIS return or pre-notify HMRC of inactivity — even in months with no subcontractor payments. Missing a nil return triggers an automatic £100 penalty.

Question 3

Can CIS Comply file my CIS return with HMRC?

Accepted Answer

No. CIS Comply is a record-keeping tool. You must file returns directly via HMRC's CIS online service or through HMRC-approved commercial software.

Question 4

How does CIS Comply protect me from HMRC investigation?

Accepted Answer

CIS Comply creates a timestamped, immutable audit trail of your due diligence checks, HMRC verifications, and compliance actions. HMRC's internal manual states that if a business has genuinely done everything it can to check the integrity of the supply chain and can demonstrate it, it is unlikely they would meet the 'knew or should have known' threshold.

Question 5

What happens if a subcontractor loses Gross Payment Status?

Accepted Answer

Under April 2026 rules, HMRC can cancel GPS immediately if fraud is detected in the supply chain, with a 5-year reapplication bar. CIS Comply alerts you when GPS review dates are approaching so you can monitor compliance proactively.

Protect Your Construction Business From Supply Chain Fraud Liability

12-Point Due Diligence Log

Compliance Dashboard

One-Click Audit Report PDF

What Happens If You Can't Prove Your Due Diligence?