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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: penalties: CIS until 05-04-07 - failure to surrender a certificate

COG909530 describes the types of certificates issued under CIS until 05-04-07.

Regulation 28(2) of the Income Tax (Subcontractors in the Construction Industry) Regulations 1993 required a subcontractor to

  • surrender his certificate to an authorised officer of the Board whenever
  • served with a notice to surrender the certificate or
  • called upon by an authorised officer of the Board to surrender it.

This regulation applied even if a certificate had expired or been cancelled.

Contractors and subcontractors were advised to destroy all documents relating to CIS until 05- 04-07 when new CIS was introduced on 06-04-07. This included certificates so the occasions where a certificate is required to be surrendered should be rare from 06-04-07.

A subcontractor who fails to surrender a certificate when required to do so may become liable to an initial penalty not exceeding £300 followed by daily penalties not exceeding £60 per day until the certificate is surrendered. The provision for this penalty is S98(1)(a) TMA 1970.

The initial penalty is determined by the First-tier Tribunal. Daily penalties should be authorised by the Authorising Officer.

Neither the initial nor daily penalties can be sought once the failure is remedied.

Whenever you consider this penalty appropriate you can

  • contact Tax Administration Litigation & Advice for advice - see COG904770.