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HMRC internal manual

Construction Industry Scheme Reform Manual

From
HM Revenue & Customs
Updated
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View Customer and Record Contact: Late Return Penalties

General

Having followed the steps listed at CISR90020to gain entry to view a contractor scheme and then selected View Customer from the Main Menu, the next window visible will be the ‘Scheme Details’ window. From this window you should select the ‘Penalties’ tab at the top of the window.

Late Return Penalties

A completed return (CIS300) will be expected from all active contractor schemes for each monthly return period, (a return period runs from the 6t h of one month to the 5t h of the next). These returns must reach HMRC by the 19t h of the month (the filing date) following the return period ended.

If the return is received after this date, or not received by the filing date, the contractor will be liable to a late return penalty. Where the return is still not received, or received late, these penalties will be as follows;

6th April 2007 to 28th October 2011

The amount of the penalty is £100 for each return and for each month (or part of) for which the return was late or outstanding. This penalty was charged each month for the first 12 months where the return was outstanding. When the return was still not received by the thirteenth month after it was due a final late return penalty was issued. This penalty (not exceeding £3000) was based on the number of occasions when CIS monthly returns (CIS300) were received from the contractor more than 12 months after the due date within the 12 month period prior to submission of the current late return. Both of these types of penalties were issued under TMA70/S98A.

From 29th October 2011

The amount of the first fixed penalty is £100 for each return which is late or outstanding. If the return is received later than, or is still outstanding, 2 months after the first penalty date, a further fixed penalty of £200 is issued.

If the return is received later than, or is still outstanding, 6 months after the first penalty date, the first tax geared penalty of £300 or 5% of the CIS Deductions shown on the return (whichever is the greater) is issued. Finally, if the return is received later than, or is still outstanding, 12 months after the first penalty date, a second tax geared penalty of £300 or 5% of the CIS Deductions shown on the return (whichever is the greater) is issued. These penalties are issued under FA09/SCH55.

There are also special rules for ‘new’ contractors who have never filed a CIS monthly return before. For further information on late return penalties under FA09/SCH55 you should refer to CISR65050

Scheme Penalties window

Selecting the ‘Penalties’ tab will take you to the ‘Scheme Penalties’ window.

The top panel lists the scheme name and Accounts Office reference.

The lower panel, titled ‘Penalties’, provides a history of the late filing penalties that have been raised against the monthly returns issued to that scheme during the last six months. This panel is populated with a list, in descending issued date order, containing the following columns;

  • Reference - this is the SAFE reference attached to the particular penalty
  • Type - indicates the type of penalty, entries being: late filing or final late filing (for penalties issued before 29th October 2011). For penalties issued after 28th October 2011, the entries will be;
  * FP1 (First fixed penalty)
     
  * FP2 (Second fixed penalty)
  * TGP1 (First tax geared penalty)
  * TGP2 (Second tax geared penalty)

For penalties issued before 29th October 2011, the entries will be;

* Late filing
* Final Late filing

For the tax year 2011/12, you could see a combination of CIS penalty types under both TMA70/S98A and FA09/SCH55.

  • Return period - this will indicate the month and year of the return to which the penalty relates.
  • Instance - These 2 digits relate to the penalty instance for the return in question. For example, if 01 was shown and the return period was ‘08 2008’, this would mean the first penalty issued relating to the return for the period ended 05/08/2008. If 02 was shown it would refer to the second penalty issued relating to the return for the period ended 05/08/2008 and so on. For CIS penalties issued after 28th October 2011 this field will remain empty.
  • Issued Date - refers to the date of issue of the penalty notice.
  • Current penalty - refers to the amount of the penalty currently charged.
  • Status - indicates the status of the penalty. Entries will be; Issued, Re-issued, Withheld or Vacated.
  • Appeal Progress - Indicates the current status of any appeal made - if this is empty there is no appeal.

You can choose to sort the list displayed by reference to any of the eight columns above so that they are displayed in either ascending or descending order. You do this by selecting the column title at the top; selecting it again will reverse the order from ascending to descending order or descending to ascending order.

You can also filter the entries shown so that the penalties are displayed for;

  • All entries - all CIS penalties issued to the scheme since the registration date for the contractor scheme will be displayed for you.
  • Issued date - you can filter the CIS penalties so that they are displayed only according to particular issue dates.
  • Return period - you can filter the CIS penalties so that they are displayed only according to particular return periods.

To filter the penalties under ‘Issued date’ and ‘Return period’ you will need to set the ‘Calendar month start’ and ‘Start year’ and ‘Calendar month end’ and ‘End year’ for the period that you wish to be displayed and then select the ‘Filter’ button. The CIS penalties will now be displayed for you for the period or return period selected.

To view full details of a particular penalty you should make a selection within the line of the appropriate penalty. This will take you to the Penalty and Appeal Overview window.

Penalty and Appeal Overview window

From this window you will be able to view details of

  • Scheme name and AO reference number

Penalty information

Details of the particular penalty selected to include;

  • Reference, Penalty Type, Current Penalty, Period End Date (Return period), Instance, and Status.

These details are duplicated from the ‘Scheme Penalties’ window and explanations of each are provided above.

Penalty history

Displays details of the history of that Penalty, to include;

  • Action taken, date of that action and the current amount of the penalty.

In the ‘action taken’ field, the various actions taken by the system will be displayed as follows;

  • Issued
  • Standover (where an appeal has been made and the penalty stood-over)
  • Amended (where the penalty has been amended or reduced to Nil)
  • Withheld - Output inhibited (where a penalty inhibition has been set)
  • Not issued - Deceased
  • Withheld - RLS (where no current address is held for the contractor scheme)
  • Not issued - Insolvent
  • Withheld - Penalty capped (where the capping limit of £3000 for fixed penalties has been reached)
  • Withheld - De minimis (where a tax geared penalty has a value less than £1)

Appeal information

If an appeal has been submitted against the penalty, details of the appeal will be shown here (depending on the progress of the appeal) which will include;

  • Date of Appeal - The date of the appeal made against the CIS penalty.
  • Grounds for Appeal - An entry from one of the following will be shown: Reasonable Excuse, HMRC Admin error and Other.
  • Appeal Progress - An entry from one of the following will be shown: Received, Being reviewed, Withdrawal invited, Listed for Personal Hearing, Determined by agreement, Upheld by HMRC, Re-opened.
  • Date of Determination - the date the penalty appeal was determined under TMA70/S54.
  • Reason for Re-opening - Where a CIS penalty appeal was re-opened.
  • Represented By - This will indicate details of the the scheme representative, agent or customer, that submitted the appeal.
  • Location of Papers - This will record the location of the CIS Penalty appeal papers where the CIS penalty appeal is filed.

[View Appeal Notes]

You can select this tab to view case notes made by the appeal administrator charting the progress of the appeal throughout its lifecycle. This button will only be ‘live’ where at least one case note has been entered.