Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Compliance Handbook

Penalties for Failure to File on Time: Types of penalties for failure to file on time: CIS returns: 12 month further penalties: Amount of penalties

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

Once you have considered the behaviour of the person, see CH62440, and concluded whether the withholding of information by failing to file was

  • deliberate and concealed,
  • deliberate but not concealed, or
  • not deliberate,

you will be able to decide what 12 month further penalty you will charge.

The amount of the penalty will depend on the behaviour and will be the greater of either

  • a fixed penalty (a fixed percentage or a fixed minimum amount), or
  • a variable percentage, determined by the persons quality of disclosure, within a penalty range determined by the persons behaviour and type of disclosure (prompted/unprompted).

The amounts of the penalty for each behaviour are explained below.

Deliberate and concealed

The penalty is the greater of

  1. 100% (variable, see Note below) of any liability to make payments (CIS deductions) which would have been shown in the return in question. See CH63560 for how to quantify a penalty that is calculated on the liability to make payments when the person has not filed the return, and
  2. £3,000.

Note: You can reduce the 100% penalty within a range to reflect the persons type and quality of disclosure, see CH63100+, but you cannot reduce the £3,000. If the  penalty is less than £3,000, you must charge £3,000.

Deliberate but not concealed

The penalty is the greater of

  1. 70% (variable, see Note below) of any liability to make payments (CIS deductions) which would have been shown in the return in question. See CH63560 for how to quantify a penalty that is calculated on the liability to make payments when the person has not filed the return, and
  2. £1,500.

Note: You can reduce the 70% penalty within a range to reflect the persons type and quality of disclosure, see CH63100+, but you cannot reduce the £1,500. If the  penalty is less than £1,500, you must charge £1,500.

Any other case (not deliberate)

The penalty is the greater of

  1. 5% (fixed, see Note below) of any liability to make payments (CIS deductions) which would have been shown in the return in question. See CH63560 for how to quantify a penalty that is calculated on the liability to make payments when the person has not filed the return, and
  2. £300.

Note: We cannot reduce the fixed 5% or the fixed £300 penalty to take account of the persons disclosure.

Once 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 CH63500+ for examples of calculations.

The penalties are not reduced by any amount that has been paid towards that liability.

If the information in the return relates to the person registered for gross CIS payments and the return has not been filed for 12 months from the penalty date, see CH62500.

See CH62900+ if the outstanding return relates to a partnership.

FA09/SCH55/PARA11

FA09/SCH55/PARA27