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HMRC internal manual

Construction Industry Scheme Reform Manual

Late Return Automatic Penalties: Introduction

CISR65600 Action Guide contents


This paragraph serves as an introductory overview of the penalties chargeable for the submission of a contractor return that is late or outstanding by its due date and the action necessary on receipt of an appeal to bring it to a settlement


  • by agreement with the appellant, or
  • following an internal review of the appeal, or
  • after determination of the appeal by the tribunal.

For deeper coverage use the above links to information or action guides within the contents at CISR65000.

The contractor return must reach HMRC within 14 days of the end of the tax month to which it relates, which is the 19th of the month. From 19th October 2007, a penalty is charged on any return or nil return that is still outstanding by its due date.

From 6th April 2007 to the 5th September 2007 inclusive HMRC did not raise penalties for any monthly returns issued during this period that were not received by the 19th of the month. This period was known as the ‘soft landing period’, see CISR65030 for further details. A CIS penalty was charged in respect of any returns issued during these months that still remained outstanding after 19th October 2007 and these penalties continued to be generated until the return(s) were received or until the final penalty due (see CISR65040) had been issued.

From 19th October 2007 until 28th October 2011 CIS penalties were issued under TMA70/S98A and the calculation of these penalties is described in detail at CISR65040. It will still be possible to issue a CIS penalty after 28th October 2011 under TMA70/S98A for a monthly return period up to and including 5th October 2011, but the penalty will need to be raised manually (see COG914000).

From 29th October 2011, CIS penalties are issued under legislation at FA09/SCH55 and the calculation of these penalties is described in detail at CISR65050.

It is possible in certain circumstances to inhibit the issue of a penalty if the contractor (or their agent) informs HMRC that they are unable to submit their monthly return by its filing date. The setting of a penalty inhibition will prevent the issue of all new automatic filing penalties for the period inhibited. See CISR65090 for further information on the setting and removal of a penalty inhibition.

Appeals can be recieved online or in writing. Once an appeal against a late return penalty is received it should be logged immediately, (see CISR65110 for further information on logging an appeal). Only appeals that are referred will go onto PAS to be worked. Other appeals may well be accepted at this stage and settled immediatelt by PAS. You will need to take action to ‘clear’ these work items depending on how the appeal is to be dealt with and eventually settled. See CISR65120 for the various actions possible to determine the appeal and CISR95650 for guidance on the necessary steps to complete these work items.