For UK construction principal contractors / FA 2004 ss.62A–62B / in force since 6 April 2026
HMRC will ask what you knew. Show them what you checked.
CIS Defence is monitoring software for UK construction supply chains. It verifies every subcontractor continuously with HMRC and Companies House, works in the background, and tells you the day something changes. The "should have known" test does not care about your intentions; it cares whether warning signs were present and whether you acted on them. CIS Defence finds the signals, and puts your response on the record.
Free 20-minute call. We run your actual supply chain through CIS Defence and show you what HMRC would see.
HMRC Compliance Passport
REF: CP/2026/08/0341
GENERATED: 01 AUG 2026, 06:00 UTC
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Exhibit A / What is at stake
The test is objective. Your intentions are not a defence.
Where you knew or should have known that a payment was connected to a deliberate CIS or PAYE failure, the Finance Act 2004 gives HMRC a chain of powers. Each one builds on the last.
20%
Of the payment
HMRC can determine that you are liable for 20% of any payment caught by the test.
FA 2004 s.62A(2)
30%
Penalty on top
A penalty of up to 30% of the determined amount, chargeable within three years of the determination becoming final.
FA 2004 s.72A
100%
Of the penalty, personally
Where the company's failure is attributable to an officer, HMRC can shift the whole penalty onto that officer by decision notice. Officers include directors, managers and shadow directors.
FA 2004 s.72B
GPS
Gross Payment Status: cancelled
Cancellation is immediate. Without gross payment status, 20% comes off every payment you receive, and there is no reapplication for five years.
FA 2004 s.66(3A)
Exhibit B / The record itself
Every check, every flag, every decision. Timestamped.
A due diligence policy is an intention. An audit trail is a defence. This is what a morning looks like in the platform's screening log.
ALERT SENT: 1 RATING CHANGE / EVERYTHING ELSE WAITS FOR THE MONTHLY DIGEST
The flag is not the failure. The unrecorded flag is.
HMRC's test asks whether warning signs were present and what you did about them. CIS Defence routes every flag to a structured senior decision, records the reasoning, and writes the whole sequence into that subcontractor's Compliance Passport.
*ILLUSTRATIVE DATA. NOT A REAL COMPANY.
Exhibit C / Your defence, layer by layer
Six checks. Every subcontractor. Every month.
CIS Defence works in the background. You hear from it the day something changes, and only when it matters: an alert when a rating changes, a site verification falls due or an override nears expiry, and a monthly digest that summarises everything else.
HMRC Gateway
CIS registration and Gross Payment Status verified against HMRC's own systems, not a cached database. Deregistrations caught the day they happen.
Forensic History
Phoenix company detection across Companies House: serial dissolutions, director linkages, recent incorporations that follow a familiar pattern.
Benchmarking
Labour rates tested against NMW, CIJC and JIB trade rates, and ASHE regional earnings. Uncommercially low pricing is HMRC's favourite red flag.
Boots on the Ground
Timestamped confirmation from your project managers of who is actually working, matched against who is being paid.
Manager Override
A structured, auditable senior sign-off when risk flags are present. Decisions recorded with the reasoning behind them.
HMRC Compliance Passport
The monthly evidence pack. Everything above, timestamped, in one PDF, ready for the day HMRC asks what you knew.
Built by tax dispute specialists
Jack Sloggett
Co-Founder
Chartered Tax Adviser & HMRC Specialist
A Chartered Tax Adviser with over a decade of experience in tax disputes and HMRC enquiry defence.
Daniel Lusted
Co-Founder
Ex-HMRC Fraud Investigation Service
Former Operational Lead in HMRC's Fraud Investigation Service.
Built with engineers with 15+ years in financial fraud detection.
Let's look at your exposure.
The most useful conversation we have is the one where we run your actual supply chain through CIS Defence and show you how your current position would survive contact with HMRC.