HMRC has confirmed that the Construction Industry Scheme will again require ‘nil returns’ from 6 April 2026. In any month where no subcontractor payments are made, contractors must submit a CIS return indicating no payments, or tell HMRC at least 14 days before the tax month begins that no payments will be made for that month. (gov.uk)

For diaries: the first affected tax month runs from 6 April to 5 May 2026. If no subcontractor payments are made in that period, a nil return falls due on 19 May 2026. HMRC guidance continues to state that CIS monthly returns are due by the 19th following each tax month. (gov.uk)

Who is caught matters for smaller firms and project SPVs. The new nil‑return duty is aimed at contractors described in section 59(1)(a) of the Finance Act 2004-businesses whose trade includes construction operations. It does not extend the nil‑return rule to ‘deemed contractors’ brought into CIS purely by high construction spend under section 59(1)(l), though their obligation to file for months in which they do make payments is unchanged. (gov.uk)

There is recent history here. In April 2015 HMRC removed the compulsory nil‑return requirement and instead encouraged contractors to submit a voluntary nil return or contact the CIS helpline for quiet months. Reinstating the formal duty closes that gap and gives HMRC clearer footing over non‑filing in silent months. (gov.uk)

The regulations also clarify a long‑standing grey area on payments to public sector bodies. A payment under a construction contract made to bodies listed in section 59(1)(b) to (k) of the Finance Act 2004-such as Crown departments, local authorities and NHS trusts-will not be treated as a ‘contract payment’ for CIS purposes. That should reduce edge‑case reporting where money flows back to public bodies. (gov.uk)

Two admin routes now matter for SME contractors. If you expect a genuinely quiet month, tell HMRC no later than 14 days before the tax month starts to switch off the filing requirement for that period-for example, notify by 22 April 2026 to avoid filing for the 6 May to 5 June tax month. If you do not pre‑notify, submit a nil return by the 19th after month‑end (so 19 June 2026 in this example). (gov.uk)

Penalty risk is real even when no tax is due. Under Finance Act 2009, Schedule 55, missing the 19th triggers an automatic £100 penalty, rising to £200 after two months, with further tax‑geared penalties of £300 or 5% of the liability at six and twelve months. HMRC’s published position confirms penalties can apply where a required return is missing, even for nil months. (gov.uk)

This change does not alter deduction rates or cash flow; it changes the cadence of compliance. The low‑friction approach is to pair CIS checks with your weekly pay run: confirm whether any subcontractor will be paid, log a pre‑notification if not, and keep your software or bureau primed to file a nil return if plans change mid‑month. For most SMEs this is minutes of extra admin that helps avoid escalating fines.

Context matters for 2026 planning. The nil‑return switch lands alongside wider CIS reforms to tackle fraud-flagged at Autumn Budget 2025-including a ‘knew or should have known’ test. Expect tighter supply‑chain checks; clean, consistent monthly filings will become an important part of demonstrating reasonable care. (addleshawgoddard.com)