12 March 2015

HMRC Confirms CIS Late Filing Penalties

HM Revenue and Customs (HMRC) has published an updated factsheet that details the penalties a company may face if they are late completing their monthly Construction Industry Scheme (CIS) return.

HMRC has confirmed that the following penalties apply:

• If a company’s CIS return is one day or more late, an initial fixed penalty of £100 will be charged;

If HMRC has still not received the return:

• two months after the date it was due, a second fixed penalty of £200 will be charged
• six months after the date it was due, a further penalty of £300 or 5% of any liability to make payments that should have been shown in the return, whichever is higher, will be charged
• 12 months after the date it was due, an additional penalty, the amount of which will depend on whether a company was deliberately withholding information from HMRC, will be charged:

– If a company was not deliberately withholding information, the penalty will be either £300 or 5% of any liability to make payments, whichever is higher
– If a company was deliberately withholding information, the penalty will be whichever of the following is the higher:

~ Up to 100% of any liability to make payments, or
~ A minimum penalty of £1,500 or £3,000.

Further information about the penalties, including how they are calculated, can be found in the factsheet Penalties for Failure to File CIS Returns on Time. The penalty rules within the factsheet only apply to CIS returns with a filing date of 19 November 2011 or later and HMRC will actively pursue any outstanding CIS returns back to this date.

Build UK Specialist Contractors can receive free advice on a range of tax and business issues, including CIS, from the Build UK Tax and Business Helpline provided by RSM. Members who require advice should call 0844 249 9875 and state that they are a member of Build UK.