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HMRC internal manual

Construction Industry Scheme Reform Manual

Late Return Automatic Penalties: Right of Appeal

CISR65600 Action Guide contents


An appeal must be made to HMRC either online or in writing within 30 days of the issue of the penalty notice, PAS will make a decision or a referral and the appellant has the right to ask for an internal review of the decision if the decision maker confirms that the penalty notice is correct. Where the appellant does not take up the offer of a review of the matter, or after the review officer has also confirmed the opinion of the decision maker, the appellant has a further 30 days during which to notify their appeal to the tribunal to decide the matter.


An appeal may however be settled before this by agreement before this between the decision maker and the appellant, see the Appeals, Reviews and Tribunals Guidance (ARTG) at ARTG2700 onwards, or between the review officer and the appellant where the offer of review is taken up. This is preferable as it can save time and effort for all involved. In particular you should try to settle all appeals against late return penalties without recourse to the tribunal if possible. However where an agreement cannot be reached, a formal paper hearing (see ARTG8370) and determination by the tribunal will be necessary.

On receipt of an appeal you should ensure that the following conditions are met. The appeal;

  • must specify the grounds for the appeal
  • must be submitted within 30 days from the date of issue of the penalty as stated on the penalty notice. If a late appeal is submitted you should refer to ARTG2240 for information on how to proceed
  • can be submitted by the contractor or an agent. In this case an agent can mean a scheme level agent, a customer level agent or a third party acting on the customer’s behalf. If the appeal is submitted by someone other than the customer, when logging the appeal, you should see CISR65610, (logging an appeal) for the entries to be made within the ‘Identify Customer’ window before proceeding to authenticate the scheme and then logging the appeal.

Where you receive an appeal against a penalty, but the appellant has not stated any grounds for their appeal, then the appeal should not be logged on to PAS. Instead, you should write to the customer first to ask them to tell us on what grounds they are making their appeal.

Where capping applies (see CISR65080) the contractor will have appealed against CIS penalties that have actually been issued. You should remember also that there may be CIS penalties that have been ‘Withheld’ as the cap of £3000 was reached. The contractor or their agent should be made aware that these ‘Withheld’ CIS penalties exist, and they should be offered the opportunity to appeal against these at the same time.

The reason for doing this is that if the appeal is later settled in favour of the appellant, that the CIS penalties now upheld are not simply replaced by other ‘Withheld’ CIS penalties possibly relating to the same return period.