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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: Special provisions when new to CIS: Initial fixed penalties and second fixed penalties

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

There are special provisions that apply where a person files their first CIS return. If, at that time, they have failed to make earlier returns there are limits on the penalties they incur.

Where a person files their first CIS return, and they had an obligation to file earlier returns, there is a maximum amount of total fixed penalties that they will be liable for on their failure to file that first return on time and the earlier returns. There are also adjustments to any penalties that the person becomes liable for at 6 or 12 months after the filing date, see CH62580.

Note that the maximum of £3,000 does not apply to earlier CIS returns that were due to be filed before November 2011, see CH62550 for an example.

Initial fixed penalty and second fixed penalty

For returns falling under these rules the total failure to file penalties cannot exceed £3,000 for

  • the initial fixed penalty, see CH62340, and
  • the second fixed penalty, see CH62360.

Note that it is only the initial fixed penalty and second fixed penalty that are included in the £3,000 maximum. The person will still be liable for any subsequent tax-geared penalties. See CH62580 for guidance on adjustments to 6 month further penalties and 12 month further penalties.

Note that the £3,000 maximum of total fixed penalties still applies even if the 12 month further penalty is deliberate or deliberate and concealed.