Employer Duty (EDVD) and Construction Industry Scheme (CIS) voluntary disclosures

HMRC have advised the CIOT that between December 2025 and mid-January 2026, they issued the attached letter to address an error identified in the way HMRC applied interest on Employer Duty (EDVD) and Construction Industry Scheme (CIS) voluntary disclosures. The letter was sent to all taxpayers who have submitted an EDVD/CIS disclosure before 1 December 2025 which had not yet been processed. All impacted taxpayers should now have received a letter. A copy of the letter is provided below.

These letters were not copied to agents. The letter recommends that the recipient shares a copy with their agent.

Background

In early 2025 HMRC identified an issue where they were only charging interest to the date of disclosure and not to the date of payment as set out in law. Once identified, they could not continue this practice and had to temporarily pause the service while they reviewed the work and identified a solution, to ensure any taxpayers who had already submitted a disclosure would not be financially impacted.

To resolve this, they paused casework at the end of July 2025 while correcting the approach. They have now resumed processing disclosures.

Processing of disclosures

For disclosures received up to 1 December 2025, HMRC will honour the previous method and apply interest only to the date of disclosure. For disclosures received after that date, interest will be charged correctly up to the date of payment.

HMRC have a backlog of work so it will take some time for them to work through disclosures.

• Disclosures that were already being processed when the pause began will be completed by the end of March 2026.
• Processing for unopened cases submitted before and after the pause will start from March 2026.

HMRC have confirmed that they have operational plans in place to address their current work on hand, and are deploying additional resource to enable cases to be progressed more quickly.

When submitting a disclosure after 1 December 2025, taxpayers will receive an auto-acknowledgement advising that HMRC have received their disclosure, and that interest will be charged to the date of payment. The acknowledgement will suggest they may wish to make a payment on account to reduce any further interest charges accruing. Individual payment references are being provided. This will help ensure the payment received will be directed to the correct account.

For those cases received prior to 1 December 2025, HMRC are working with their payments team to confirm the most suitable process to ensure payments received remain allocated for the purpose they were submitted.  

Employer and Construction Industry Scheme (CIS) Tax voluntary disclosures letter