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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
Updated
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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: Example

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

This page provides an example of the adjustments made to penalties when the person is new to CIS.

Value Construction Limited was selected for a compliance check in January 2015 because it had included a deduction for payments to subcontractors on its tax return but had not registered as a contractor or filed any CIS returns (CIS300).

Our enquiries establish that it has been paying subcontractors within the scope of CIS since 15 December 2013 and so it should have registered as a contractor and filed CIS300’s for the months ended 5 January 2014 to 5 December 2014. We have found no evidence that the company was deliberately withholding information.

The total of Value Construction Limited’s initial fixed penalties and second fixed penalties cannot exceed £3,000.

Where a return is not filed after 6 and 12 months, the penalties are 5% of the total CIS deductions that should have been included on the return. The minimum penalty of £300 does not apply.

Note that CIS return periods end on the 5th of the month and the filing date is the 19th of the month in which the return period ended. The penalty date is the 20th of the month, being the day after the filing date.

Value Construction Limited is liable for the following penalties to 6 January 2015.

 

 

Period ended Amount of CIS deductions that should have been returned  

 

Date liable to penalty  

 

Name of penalty Initial & second fixed penalties 6 month further penalties (5% of the amount that should have been returned)
     
     
5 Jan 2014  
£3,000 20 Jan 2014 Initial fixed penalty £100  
  20 Mar 2014 Second fixed penalty £200  
  20 Jul 2014 6 month further penalty   £150
         
5 Feb 2014  
£1,000 20 Feb 2014 Initial fixed penalty £100  
  20 Apr 2014 Second fixed penalty £200  
  20 Aug 2014 6 month further penalty   £50
         
5 Mar 2014  
£2,000 20 Mar 2014 Initial fixed penalty £100  
  20 May 2014 Second fixed penalty £200  
  20 Sept 2014 6 month further penalty   £100
         
5 Apr 2014  
£3,500 20 Apr 2014 Initial fixed penalty £100  
  20 Jun 2014 Second fixed penalty £200  
  20 Oct 2014 6 month further penalty   £175
         
5 May 2014  
£1,500 20 May 2014 Initial fixed penalty £100  
  20 Jul 2014 Second fixed penalty £200  
  20 Nov 2014 6 month further penalty   £75
         
5 Jun 2014  
£2,000 20 Jun 2014 Initial fixed penalty £100  
  20 Aug 2014 Second fixed penalty £200  
  20 Dec 2014 6 month further penalty   £100
         
5 Jul 2014  
£1,000 20 Jul 2014 Initial fixed penalty £100  
  20 Sept 2014 Second fixed penalty £200  
  20 Jan 2015 6 month further penalty   £50
         
5 Aug 2014  
£1,500 20 Aug 2014 Initial fixed penalty £100  
  20 Oct 2014 Second fixed penalty £200  
         
5 Sep 2014  
£2,000 20 Sep 2014 Initial fixed penalty £100  
  20 Nov 2014 Second fixed penalty £200  
         
5 Oct 2014  
£3,000 20 Oct 2014 Initial fixed penalty £100  
  20 Dec 2014 Second fixed penalty £200  
         
5 Nov 2014  
£2,500 20 Nov 2014 Initial fixed penalty £100  
  20 Jan 2015 Second fixed penalty £200  
         
5 Dec 2014  
£3,000 20 Dec 2014 Initial fixed penalty £100  
  20 Jan 2015 Second fixed penalty £200  
    TOTAL £3,500 £700
  Limited to £3,000    

Value Construction Limited will be liable to total penalties of £3,700.