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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Penalties for Failure to File on Time: Types of penalties for failure to file on time: CIS returns: Overview

This page only applies to the Construction Industry Scheme (CIS).

A person is liable to a penalty when they fail to file their CIS return (CIS300) by the filing date. The penalty date is the day after the filing date. They will be liable to further penalties where their return remains outstanding for 2, 6 and 12 months from the penalty date. After 12 months from the penalty date, the amount of penalty also varies depending on the reason for the failure, and whether the information withheld would enable or assist HMRC assessing the person’s correct liability of CIS deductions.

The penalties are summarised in the table.

When liable to penalty Type of penalty Amount of penalty Guidance
       
On the penalty date Initial fixed penalty    
  Fixed £100 CH62340  
2 months after the penalty date      
  Second fixed penalty Fixed £200 CH62360
       
6 months after the penalty date  
6 months further penalty Greater of

5% of the liability that would have been shown in the return, and

£300
  |  

CH62380  
   

 

 

 

 

 

12 months after the penalty date  

 

 

 

 

 

12 month further penalty If deliberate and concealed, greater of

100% of the liability that would have been shown in the return, and

£3,000
  |  

 

 

 

 

 

CH62400+

 

 

   
  If deliberate but not concealed, greater of

70% of the liability that would have been shown in the return, and

£1,500  
  If not deliberate, greater of

5% of the liability that would have been shown in the return, and

£300
  |

See the diagram(word 29KB) of the penalties for CIS returns.

Note that after a return or other document is outstanding for 12 months, a person can demonstrate more than one behaviour regarding information in that return. The penalty is calculated using the highest penalty percentage that is applicable, see CH62440.

The person can receive a reduction to the 12 month 100% or 70% penalty if they make a disclosure, see CH63100+. But, we cannot reduce the 12 month 5% penalty for a disclosure.

There are special provisions covering people who are registered for ‘gross payment’ only, see CH62500.

Where a person files their first CIS return and we identify that they should have filed earlier returns, there are adjustments to the late filing penalties that apply, see CH62520+.

FA09/SCH55/PARAS 7-13