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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: 12 month further penalties: Behaviour

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

A person is liable to a 12 month further penalty if their monthly return (CIS300) remains outstanding 12 months after the penalty date, see CH61180.

Example

James was due to file his CIS300 on 19 April 2012. This is the filing date. The penalty date is 20 April 2012. If the failure continues James will be liable to the following penalties.

* Initial fixed penalty of £100 on 20 April 2012.
* Second fixed penalty of £200 on 20 June 2012.
* 6 month further penalty on 20 October 2012.
* 12 month further penalty on 20 April 2013.

The amount of penalty that applies after 12 months takes into account the behaviour of the person and whether, by failing to deliver the return or other document by the filing date, the person deliberately withheld information that would enable or assist HMRC to assess the amount they are liable to pay.

Information deliberately withheld

If, by failing to make a return, the person deliberately withholds information, the withholding of that information is either

  • ‘deliberate and concealed’ if the person deliberately withholds information and makes arrangements to conceal the fact that the information has been withheld, or
  • ‘deliberate but not concealed’ if the person deliberately withholds the information but does not make arrangements to conceal the fact that the information has been withheld.

Information not deliberately withheld

If, by failing to make a return, the person does not deliberately withhold information the failure is still subject to a penalty that is the greater of

  • 5% of the liability to make payments (CIS deductions) that would have been shown in the return, or
  • £300.

Where the person has demonstrated more than one behaviour it is the highest penalty percentage attributable to the behaviours demonstrated that is used to calculate the 12 month further penalty.

Without further information about why the return or other document was not filed 12 months after the filing date, the person will be liable to a 5% penalty. We will increase the percentage of the penalty if enquiries establish that the person deliberately withheld information.

See CH62460 for examples of

  • deliberate but not concealed, and
  • deliberate and concealed.

See CH62480 for details of the penalties that apply where the person withholds information.

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

FA09/SCH55/PARA11

FA09/SCH55/PARA27