For many construction businesses, gross payment status (GPS) is just part of how things work. You get paid gross, cash flow stays predictable, jobs keep moving. Simple.

But from 6 April 2026, changes to HMRC’s Construction Industry Scheme (CIS) mean the rules around gross payment status (GPS) have shifted, and the consequences of getting it wrong are far more serious than most expect.

This isn’t just about your business anymore

Historically, under CIS, if something went wrong in the supply chain, it tended to sit with the party directly responsible. That’s no longer the case.

HMRC now has the power to look further up the chain and ask a much tougher question:

“Should you have known?”

If the answer is yes, or even “maybe”, the implications can be significant.

What’s actually changed?

At a high level, HMRC now has the ability to:

• Remove your gross payment status immediately, without prior notice /li>
• Prevent you from reapplying for up to five years
• Hold your business liable for tax lost elsewhere in the supply chain
• Apply penalties not just to the business, but to directors and connected individuals

These aren’t minor adjustments. They fundamentally change the level of exposure for contractors and subcontractors alike.

Why this matters more than it sounds

Losing gross payment status isn’t just an administrative issue. It has a direct and immediate impact on cash flow. Instead of being paid in full, deductions of 20% (or more in some cases) are applied at source. For many businesses, that’s the difference between operating comfortably and feeling constant pressure.

And that’s before you consider, the reputational impact, the disruption to projects, the time spent dealing with HMRC and the difficulty of regaining status

This is one of those changes where the downside is disproportionately large compared to the effort required to avoid it.

The real shift is responsibility

The biggest change isn’t the rules themselves, it’s where responsibility now sits. You’re no longer just responsible for your own compliance, you’re expected to take reasonable steps to understand who you’re working with.

That includes asking questions like:

• Does this subcontractor look commercially credible?
• Are their pricing and terms realistic?
• Is there anything unusual about how they operate?

If something doesn’t feel right and no one challenges it, that’s where risk starts to build.

Where businesses get caught out

In most cases, it’s not deliberate wrongdoing, it’s gaps in process.

Things like:

• Relying on one-off checks instead of ongoing monitoring
• Not documenting decisions or due diligence
• Taking pricing at face value without question
• Working with new or unknown entities without deeper checks

Individually, these might not feel like major issues, but collectively, they create exposure.

So what should you be doing?

The key here is to not over complicate things. It’s about having a clear, consistent approach that you can stand behind.

That means:

• Having a structured onboarding process for subcontractors
• Carrying out checks that go beyond the basics
• Keeping records of the decisions you make
• Training your team to spot potential red flags
• Reviewing relationships on an ongoing basis, not just at the start

The key word here is evidence. If HMRC ever asks the question, you need to be able to show the steps you took, not just say you took them.

The upside (yes, there is one)

This isn’t designed to catch out well-run businesses.

In fact, HMRC has been clear that businesses carrying out proper, documented checks should be protected.

So while the rules are stricter, they also create a clearer line:

• If you’ve done the right things, you’re in a strong position
• If you haven’t, the risk is much higher than it used to be

For most construction businesses, gross payment status is something you don’t think about until you have to.

From April 2026, that’s a riskier position to take, because once it’s gone, the impact is immediate and getting it back isn’t quick.

The businesses that stay ahead of this won’t be the ones doing more.
They’ll be the ones doing it properly, and being able to prove it.

How Wilson Partners can help

We’re working with construction businesses to review their current processes, identify gaps, and put practical, scalable systems in place to protect their gross payment status before it becomes an issue.

From supply chain reviews to ongoing compliance support, our focus is simple, helping you stay in control and avoid unnecessary risk.