The CIS deduction rates did not change for 2026/27: they are still 20%, 30% and 0%. What changed on 6 April 2026 are HMRC's powers against fraud in construction supply chains, announced at Budget 2025.
What HMRC can now do
If a business makes a payment for construction work, or claims a CIS credit on a return, and it knew or should have known this was connected to deliberate non-compliance by someone else, HMRC can:
- remove the business's gross payment status immediately;
- charge the business the lost tax (20% of the payment made, or an amount equal to the CIS credit claimed);
- charge a penalty of up to 30% of that lost tax, which can be passed to directors or other officers.
Five years before you can reapply
Where gross payment status is removed immediately for these reasons, the business cannot reapply for 5 years. Before, the wait was 1 year. The business can appeal in writing within 30 days of the cancellation.
Who it affects
HMRC says the measures target the small minority of businesses that knowingly deal with fraudulent suppliers. For everyone else, the practical step is due diligence on your supply chain: verify subcontractors, check who you are paying and keep records.
What it means for this calculator
Nothing changes in the sum. The CIS calculator still applies 20%, 30% or 0% to the invoice after VAT, materials and other allowed costs.
Sources: GOV.UK — tackling CIS fraud (policy paper) · GOV.UK — GfC12 labour supply chain assurance · HMRC manual CISR85010.
Estimates only, not tax advice.