The five-year reapplication ban is the period during which a subcontractor whose Gross Payment Status has been revoked on fraud-related grounds is prohibited from reapplying for GPS. It was introduced by Finance Act 2026 (Royal Assent 18 March 2026, in force 6 April 2026), replacing the previous one-year ban.

Before April 2026, a contractor who lost GPS because HMRC determined it had connections to supply-chain fraud was barred from reapplying for GPS for one year. Finance Act 2026 extended that to five years, a fivefold increase in the effective penalty period. The change was designed to make GPS fraud a genuinely unattractive risk, given that losing GPS has immediate and severe cash-flow consequences.

The cash-flow arithmetic is significant. A construction business with £500,000 a year in labour receipts that loses GPS moves from a 0% CIS deduction to a 20% deduction on every payment. That means £100,000 a year withheld by contractors as advance tax, rather than arriving in the business's bank account. Over a five-year ban, the cumulative cash withheld reaches approximately £500,000. That money is recoverable via Self Assessment or Corporation Tax, but only with a significant lag.

The five-year ban applies where GPS is revoked on fraud grounds (that is, where the “knew or should have known” standard is met). GPS lost through an ordinary compliance failure (a late Self Assessment return, for example) does not trigger the five-year ban; the subcontractor can reapply once a clean 12-month compliance record is re-established.

  • Old rule (pre-April 2026): 1-year reapplication ban on fraud-grounds revocation.
  • New rule (from 6 April 2026): 5-year reapplication ban.
  • Annual cash-flow cost example: approx. £100,000 for £500,000 turnover.
  • Does not apply to: GPS loss through a compliance failure (only fraud-grounds revocation).

The full GPS anti-fraud regime introduced by Finance Act 2026 is explained at CIS April 2026 rule changes explained. The GPS qualifying conditions are at CIS gross payment status: how to qualify, apply and keep it.