Several important updates to the Construction Industry Scheme (CIS) came into effect on 6 April 2026 following the Autumn Budget 2025 announcements.

These changes affect contractors and subcontractors across the construction sector and introduce stricter compliance requirements alongside tougher penalties for late filing and fraud-related activity.

Monthly CIS Returns Are Now Mandatory Again

From April 2026, contractors must now either:

  • submit a CIS return every month — including nil returns where no subcontractors have been paid; or
  • notify HMRC in advance by submitting an inactivity request for months where no subcontractor payments will be made.

This marks the return of full monthly filing obligations, even during quieter trading periods.

Late Filing Penalties Have Returned

HMRC has also reinstated the full CIS late filing penalty regime.

If a CIS return is submitted late, the following penalties may apply:

  • £100 fixed penalty immediately after missing the deadline
  • Additional £200 penalty after two months
  • Further penalties after six months, being the higher of:
    • £300, or
    • 5% of the CIS liability
  • Additional tax-geared penalties after 12 months depending on the circumstances surrounding the delay

For businesses managing multiple subcontractors, keeping filing deadlines under control is now more important than ever.

Tougher Action on Fraud and Gross Payment Status (GPS)

HMRC has also strengthened its powers where fraud is suspected within the CIS system.

Where a business makes or receives payments connected to fraudulent arrangements — or where they reasonably should have known about the fraud — HMRC can now:

  • immediately remove Gross Payment Status (GPS),
  • recover unpaid tax, and
  • apply penalties of up to 30%.

In addition, businesses that lose GPS status under these rules will now need to wait five years before reapplying, increased from the previous one-year restriction.

Staying Compliant

The CIS regime is becoming increasingly compliance-focused, and even administrative oversights can now lead to significant financial consequences.

At Harris Lacey and Swain, we help construction businesses stay compliant, manage CIS obligations efficiently, and avoid unnecessary penalties.

If you are unsure how these changes affect your business, our team would be happy to help.

SDLT and ‘Mixed Use’ Property – Why Classification Matters

When purchasing property in England, Stamp Duty Land Tax (SDLT) can represent a substantial additional cost.

One area that often causes confusion is whether a property qualifies as residential or mixed use for SDLT purposes.

What Is Mixed Use Property?

A property may be treated as mixed use where it includes both residential and non-residential elements, such as:

  • farmland,
  • commercial premises,
  • agricultural land,
  • workshops or business space, or
  • land not considered part of the residential grounds.

Mixed use properties benefit from lower SDLT rates compared to purely residential purchases, making the classification particularly attractive for buyers.

Recent Tribunal Case Highlights HMRC Scrutiny

A recent Upper Tribunal case, HMRC v Christopher Brzezicki [2026], demonstrates how closely HMRC examines these claims.

The purchaser acquired:

  • a substantial residential property,
  • a fishing stream, and
  • an island,

and argued that the purchase should qualify as mixed use.

Although the First-tier Tribunal initially agreed, the Upper Tribunal later overturned the decision.

The ruling found that the stream and island formed part of the property’s residential “grounds” and were not genuinely non-residential in nature.

Importantly, while trout naturally bred within the stream, the land was not being operated commercially at the time of purchase.

What Buyers Should Take From This

This case reinforces that unusual land features alone do not automatically create mixed use treatment.

The key factor is how the land is genuinely used in practice and whether it would ordinarily be viewed as part of the residential property.

Incorrectly claiming mixed use SDLT rates can lead to:

  • additional SDLT charges,
  • interest,
  • HMRC enquiries, and
  • potential penalties.

Before relying on mixed use treatment for an SDLT transaction, it is always advisable to seek professional advice.

At Harris Lacey and Swain, we can help review property purchases, assess SDLT treatment correctly, and ensure claims are properly supported before submission to HMRC.