Ignorance is no longer a defense in your supply chain.
As of April 6, 2026, new HMRC rules mean your construction business is on the hook for your subcontractors’ tax non-compliance. You don’t even need to be complicit. If HMRC decides a “reasonable business” should have known there was a risk, you are liable.
The cost of a blind eye:
- Direct Financial Hit: A 20% CIS charge on the payment, plus a 30% penalty (e.g., £100k of tainted payments instantly costs you £26,000).
- Operational Sabotage: Immediate loss of Gross Payment Status with a strict 5-year ban on reapplying.
- Personal Liability: HMRC can pierce the corporate veil, transferring penalties directly to directors and officers.
A one-and-done background check at the start of a contract is exactly the trap HMRC expects you to fall into. Supply chain due diligence is no longer just admin—it is active risk management.
The critical question: If an HMRC inspector walked in today, would your ongoing, documented verification process prove you did everything a reasonable business would? If the answer isn’t a confident yes, you need to overhaul your CIS checks immediately.
