Supporting Guidance: employer compliance: guidance by subject: construction industry scheme (CIS): penalties - overview
The CIS places various obligations on a contractor and subcontractor. Many of those obligations are described in this Chapter.
Where a contractor or subcontractor fails to meet those obligations he may become liable to a penalty.
- consider all penalty offences committed by a contractor or subcontractor and
- seek a penalty where appropriate.
Table 1 (Word 37KB) provides a summary of the penalty offences that may arise in relation to the CIS that was in operation up to 05-04-07.
Table 2 (Word 41KB) provides a summary of the penalty offences that may arise in relation to the CIS that has been in operation from 06-04-07.
Late Filing Penalty
The late filing of a monthly CIS300 return will make a contractor liable to a penalty under
- Section 98A(2)(a) and (b) TMA 1970 for return periods up to and including returns due for the month ending 5 October 2011
- Sch55 FA 2009 for return periods from 6 October 2011.
Note: A mandatory mitigation policy is now in place for all late filing penalties chargeable under Section 98A(2)(a) and (b) TMA 1970. Full guidance on this policy is at COG914296.
Several of the penalties are subject to Article 6 of the Human Rights Act (COG906050). Several will involve consideration of abatement factors to arrive at an appropriate level of penalty (COG914090).
- provide HRA advice factsheet CC/FS9
- issue factsheet CC/FS19 relating to penalties chargeable for returns with filing dates prior to 31 March 2009
- issue factsheet CC/FS7a relating to penalties chargeable for returns with filing dates after 01 April 2009
at the appropriate time (COG906060).
Penalties will usually be recovered as part of a contract settlement. You must
- make sure that the letter of offer is correctly worded to reflect the penalties being included.
In any cases of doubt or difficulty you should
- contact TAA (Liverpool) for advice.
Where a penalty offence has been committed you must also
- consider whether it is appropriate to cancel gross payment registration (COG910110).