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HMRC internal manual

Compliance Handbook

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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: Amount of penalties

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

Once you have examined the behaviour of the person, see CH62440, and concluded whether the withholding of information was

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

you charge the 12 month further penalty at the appropriate percentage as follows.

Deliberate and concealed

The penalty is the greater of

  1. 100% 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 that we can reduce this penalty if the person made a disclosure, see CH63100+.

Deliberate but not concealed

The penalty is the greater of

  1. 70% 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 that we can reduce this penalty if the person made a disclosure, see CH63100+.

Any other case (not deliberate)

The penalty is the greater of

  1. 5% 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 that we cannot reduce this penalty if the person made a disclosure, see CH63100+.

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 CH63500+ for examples of calculations.

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

We can reduce the penalty percentages of 70% and 100% where the person makes a disclosure of information that was withheld by failing to make the return, see CH63100+, but note that we are unable to reduce the 5% penalty if the person makes a disclosure.

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