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

HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
, see all updates

Penalties for Failure to File on Time: Types of penalties for failure to file on time: CIS returns: Special provisions when new to CIS: 6 month further penalties and 12 month further 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, see CH62560. There are also adjustments to any penalties that the person becomes liable for at 6 or 12 months after the filing date.

Note that the adjustment to ignore the £300 minimum for the 6 month further penalty and 12 month further penalty do not apply to earlier CIS returns that were due to be filed before November 2011, see CH62550 for an example.

6 month further penalty

For returns falling under these rules the 6 month further penalty, see CH62380, is simply 5% of the liability to make payments (CIS deductions) which would have been shown in that return. There is no minimum penalty of £300. See CH62600 for an example.

Note that the minimum penalty does not apply even if the 12 month further penalty is deliberate or deliberate and concealed.

12 month further penalty

For returns falling under these rules the 12 month further penalty, see CH62440, depends on whether information was deliberately withheld.

If information was not deliberately withheld the 12 month further penalty is simply 5% of the liability to make payments (CIS deductions) which would have been shown in that return. There is no minimum penalty of £300.

The normal penalty rules apply, see CH62400+. Where information was

  • deliberately withheld but not concealed, the penalty is 70% of the liability to make payments (CIS deductions) that would have been shown in the return, or a minimum of £1,500, or
  • deliberately withheld and also concealed, the penalty is 100% of the liability to make payments (CIS deductions) that would have been shown in the return, or a minimum of £3,000.

FA09/SCH55/PARA13