If you’re in construction, you’re no stranger to the red tape that comes with the Construction Industry Scheme (CIS). But in 2025, things have stepped up a notch — and not in a good way. HMRC is tightening its grip on CIS compliance, and more builders are finding themselves caught out by rules they thought they had under control.
Whether you’re a sole trader or running a team of subcontractors, this post will help you understand the risks and show you how to stay one step ahead.
Why the Pressure’s On in 2025
HMRC has made it clear: CIS non-compliance is on their radar. With the rise of digital tax tools and real-time reporting, there’s more opportunity — and more expectation — for contractors to get it right.
We’re seeing:
- More penalties for late submissions
- Increased audits on subcontractor status
- Stricter rules on gross payment status reviews
The days of “hope for the best and sort it at year-end” are over. Mistakes are now being flagged quickly — and acted on.
The Most Common CIS Mistakes We See
CIS is one of those areas where you don’t know you’ve gone wrong… until it’s too late. Here are the top pitfalls we’re seeing in 2025:
❌ Misclassifying subcontractors as employees This can trigger payroll liabilities, penalties, and even legal claims.
❌ Incorrect or missing deduction statements Subcontractors need a statement every time you deduct tax. Without it, you’re in breach.
❌ Late CIS returns Even being one day late can land you with a penalty — and it stacks monthly.
❌ Assuming gross payment status is permanent HMRC is revoking it more often due to late VAT or tax payments, even by just a few days.
What’s New in 2025?
This year, HMRC is rolling out more targeted audits and using real-time data to catch issues faster. Key updates include:
🔍 Focus on subcontractor validation — If you’re paying someone without verifying their UTR and tax status, you’re exposed.
📊 Cross-checking VAT and PAYE submissions — Delays or mismatches can trigger a CIS review.
🚨 Gross payment status reviews happening mid-year, not just annually.
📥 Increased push for digital compliance tools — Manual spreadsheets are no longer cutting it in the eyes of HMRC.
How It’s Impacting Builders
These crackdowns are causing real pain for construction businesses:
- Cash flow delays – Gross payment status being revoked means CIS tax is deducted at source, straining cash flow.
- Admin overload – Chasing missing deduction statements, fixing errors, and handling audits steals time from jobs.
- Stress and uncertainty – Builders are worried about getting it wrong — even when they think they’re doing things by the book.
Our Solution: Proactive CIS Protection
At SGL Accountancy, we’ve built our finance office service specifically for builders and trades.
✅ We run monthly CIS checks — so you know your returns are done right and on time.
✅ We monitor gross payment status eligibility — helping you stay compliant across PAYE, VAT, and corporation tax.
✅ We set up smart systems for subcontractor onboarding and deduction statements — no more chasing paperwork.
✅ We provide audit-ready records — so if HMRC does come calling, you’re prepared and protected.
This isn’t just box-ticking. It’s about protecting your cash, your reputation, and your sanity.
📞 Want peace of mind on CIS? Let’s review your setup.
If CIS gives you a headache, let’s take it off your hands. Book a free 15-minute review call and we’ll show you exactly how to stay compliant — without drowning in admin.