The CIS Change That Landed on Landlords, Not Just Their Contractors

This piece was first published in Welsh Housing Quarterly (WHQ), Issue 143, Autumn 2026. Below is a short introduction. The full article is on WHQ’s website for members.

Two problems for social landlords

Since the new CIS supply chain rules came into force on 6 April 2026, most of the people I speak to who run housing programmes have treated them as something for their contractors to worry about. In the piece I argue that most social landlords in Wales have two problems to deal with.

The first sits with the contractors you appoint. Under section 62A of the Finance Act 2004, inserted by the Finance Act 2026, HMRC can charge a business 20% of a payment it made if it knew or should have known about a deliberate CIS or PAYE failure further down the chain. HMRC can also cancel that business’s Gross Payment Status with immediate effect, and it cannot reapply for five years. If that happens to a contractor partway through your programme, the delay is yours too.

The second is easier to miss. A council or housing association that spends more than £3m on construction operations in any rolling 12 months is a CIS contractor in its own right. Its own payments then come under the same rules, along with the same “knew or should have known” test.

In the full article

The full piece covers where the own-use exemption does and does not help, the questions worth putting to the contractors you appoint, and what HMRC’s guidance says it will look for when it reviews what you knew.

Further reading

• CIS Changes 2026: What Changed, and Who It Catches.
• Joint and Several Liability in CIS: How HMRC’s 20-Year Strategy Reached Construction.
• How to Verify a CIS Subcontractor with HMRC, Step by Step.
• What CIS Verification Actually Checks (and What It Doesn’t).

Sources

• Finance Act 2004, section 59, on who counts as a contractor.
• HMRC CIS Reform Manual, CISR16040, on the £3m threshold for public bodies.
• Finance Act 2004, section 62A, on payments made in the knowledge of deliberate failures.
• Finance Act 2004, section 66, on cancelling Gross Payment Status.

Checked against legislation.gov.uk and HMRC guidance on 4 November 2026.