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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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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 - examples

The following scenarios provide examples of different behaviours leading to withholding information.

Example 1 - deliberate but not concealed

Shadia was registered as a contractor and filed CIS300 returns on time for the 6 months ended October 2011. She then informed us that she would no longer be engaging subcontractors so we closed her contractor record, see CISR31050.

However, during a compliance check of her employer obligations in September 2015 we see that Shadia started paying subcontractors again in April 2014 but did not tell us. Shadia admits to paying the subcontractors and does not try to conceal the information.

Shadia should have filed monthly returns for the 16 months ended 5 August 2015. As the four returns for each of the months ended 5 May 2014 to 5 August 2014 are more than 12 months late we must consider the reasons for the failures. Note that later returns are also overdue and are liable for initial fixed penalties, second fixed penalties and 6 month further penalties.

Shadia was previously registered as a contractor, so was fully aware of her filing obligations. She also failed to inform us when she recommenced paying subcontractors. In this case by failing to file returns Shadia deliberately withheld information about paying these subcontractors but she didn’t conceal the payments.

Example 2 - deliberate and concealed

The facts are as in example 1, except that Shadia tried to hide the payments she made to subcontractors by describing them as repairs and maintenance in her business records. In this case Shadia deliberately withheld details of the payments to subcontractors from us and she also tried to conceal this information. Therefore, we consider that she deliberately withheld and concealed information.

Example 3 - deliberate but not concealed, and deliberate and concealed

The facts are as in example 1, except that Shadia hid some payments to subcontractors by describing them as repairs and maintenance, but correctly recorded some payments. So she deliberately withheld and concealed some information, and some information was only deliberately withheld.

Example 4 - not deliberately withheld

The facts are as in example 1, except that Shadia had not previously engaged contractors and contended that she was not aware of her obligation to file CIS returns. In this case we conclude that Shadia did not deliberately withhold information. As Shadia is considered new to CIS her penalties would be considered for possible adjustments, see CH62520+.