New legislation from April 2026

CIS Compliance Suite

Proactive due diligence software that protects your business from CIS fraud liability. Monitor your subcontractor supply chain, document your compliance efforts, and be prepared if HMRC comes calling.

From April 2026, You Could Be Liable for Your Subcontractors' Tax Fraud

New legislation introduces the "knew or should have known" principle to CIS. If HMRC determines you failed to conduct adequate due diligence on your supply chain, you could face immediate GPS removal, liability for lost tax, and penalties of up to 30%.

Read the Full Explanation →

The Consequences of Inadequate Due Diligence

Even if you had no involvement in the fraud, HMRC can hold you responsible if you "should have known" something was wrong.

Immediate GPS Removal

Your Gross Payment Status can be cancelled immediately, with 20% deducted from every payment you receive. You cannot reapply for 5 years.

Liability for Lost Tax

You could be held liable for the tax that someone else in your supply chain failed to pay—even if you're five levels removed from the fraud.

Penalties Up to 30%

On top of the lost tax, HMRC can charge penalties of up to 30%—and these can be charged personally to directors and officers.

Proactive Due Diligence, Documented

The CIS Compliance Suite gives you oversight of your entire supply chain and creates the evidence trail you need to defend against HMRC enquiries.

1

Continuous Subcontractor Monitoring

Automatically monitor your subcontractors against key risk indicators. The system checks Companies House data, GPS status changes, VAT registration validity, director histories, and more—alerting you when something changes that requires attention.

2

Risk Scoring and Red Flag Detection

Each subcontractor receives a dynamic risk score based on multiple factors including company age, director history, payment patterns, and supply chain position. The system flags potential issues—like phoenix company indicators or uncommercial pricing—before they become problems.

3

Supply Chain Visibility

Understand your exposure across your entire supply chain, not just your direct subcontractors. The system tracks supply chain depth and escalates due diligence requirements proportionally—because HMRC's GfC12 guidance makes clear that long supply chains are a red flag.

4

HMRC-Ready Documentation

Generate comprehensive risk assessment reports that document exactly what due diligence you performed and when. If HMRC opens an enquiry, you have a complete evidence pack demonstrating you took reasonable care to verify your supply chain.

Built for HMRC Enquiry Defence

The "knew or should have known" test is objective—your intentions don't matter, only whether warning signs were present and whether you acted on them.

Risk Assessment Reports

Detailed documentation of every risk assessment performed, including:

  • Data sources checked and verification dates
  • Risk factors identified and how they were addressed
  • Decisions made and the rationale behind them
  • Sign-off records with timestamps

Continuous Monitoring Evidence

Demonstrate ongoing vigilance with documented records of:

  • Regular verification cycles (not just onboarding)
  • Alerts triggered and actions taken
  • Changes in subcontractor status over time
  • Escalation procedures followed

Due Diligence Checklist

Evidence that you followed a systematic process:

  • Standardised onboarding procedures
  • Documented verification of CIS registration
  • GPS status confirmation
  • VAT registration cross-reference

Export Evidence Pack

One-click export of all documentation for any subcontractor:

  • Complete audit trail in PDF format
  • All verification records and reports
  • Chronological history of interactions
  • Ready for submission to HMRC

Boots on the Ground

Some things can only be verified by someone on site. Tax Radar lets you send verification questions to project managers who can confirm what the paperwork can't tell you. All responses are timestamped and stored as part of your evidence trail for HMRC defence.

Protect Your Business Before April 2026

The time to establish your due diligence procedures is now—not when HMRC opens an enquiry. Speak with our team about how Tax Radar can help.