SolvedCH62600 | Penalties for Failure to File on Time: Types of penalties for failure to file on time: CIS returns: Special provisions when new to CIS: Example
From HM Revenue & Customs · Compliance Handbook
This page only applies to the Construction Industry Scheme (CIS).
This page provides an example of the adjustments made to penalties when the person is new to CIS.
Value Construction Limited was selected for a compliance check in January 2015 because it had included a deduction for payments to subcontractors on its tax return but had not registered as a contractor or filed any CIS returns (CIS300).
Our enquiries establish that it has been paying subcontractors within the scope of CIS since 15 December 2013 and so it should have registered as a contractor and filed CIS300’s for the months ended 5 January 2014 to 5 December 2014. We have found no evidence that the company was deliberately withholding information.
The total of Value Construction Limited’s initial fixed penalties and second fixed penalties cannot exceed £3,000.
Where a return is not filed after 6 and 12 months, the penalties are 5% of the total CIS deductions that should have been included on the return. The minimum penalty of £300 does not apply.
Note that CIS return periods end on the 5th of the month and the filing date is the 19th of the month in which the return period ended. The penalty date is the 20th of the month, being the day after the filing date.
Value Construction Limited is liable for the following penalties to 6 January 2015.
| Period ended | Amount of CIS deductions that should have been returned | Date liable to penalty | Name of penalty | Initial & second fixed penalties | 6 month further penalties (5% of the amount that should have been returned) |
|---|---|---|---|---|---|
| 5 Jan 2014 | £3,000 | 20 Jan 2014 | Initial fixed penalty | £100 | |
| 20 Mar 2014 | Second fixed penalty | £200 | |||
| 20 Jul 2014 | 6 month further penalty | £150 | |||
| 5 Feb 2014 | £1,000 | 20 Feb 2014 | Initial fixed penalty | £100 | |
| 20 Apr 2014 | Second fixed penalty | £200 | |||
| 20 Aug 2014 | 6 month further penalty | £50 | |||
| 5 Mar 2014 | £2,000 | 20 Mar 2014 | Initial fixed penalty | £100 | |
| 20 May 2014 | Second fixed penalty | £200 | |||
| 20 Sept 2014 | 6 month further penalty | £100 | |||
| 5 Apr 2014 | £3,500 | 20 Apr 2014 | Initial fixed penalty | £100 | |
| 20 Jun 2014 | Second fixed penalty | £200 | |||
| 20 Oct 2014 | 6 month further penalty | £175 | |||
| 5 May 2014 | £1,500 | 20 May 2014 | Initial fixed penalty | £100 | |
| 20 Jul 2014 | Second fixed penalty | £200 | |||
| 20 Nov 2014 | 6 month further penalty | £75 | |||
| 5 Jun 2014 | £2,000 | 20 Jun 2014 | Initial fixed penalty | £100 | |
| 20 Aug 2014 | Second fixed penalty | £200 | |||
| 20 Dec 2014 | 6 month further penalty | £100 | |||
| 5 Jul 2014 | £1,000 | 20 Jul 2014 | Initial fixed penalty | £100 | |
| 20 Sept 2014 | Second fixed penalty | £200 | |||
| 20 Jan 2015 | 6 month further penalty | £50 | |||
| 5 Aug 2014 | £1,500 | 20 Aug 2014 | Initial fixed penalty | £100 | |
| 20 Oct 2014 | Second fixed penalty | £200 | |||
| 5 Sep 2014 | £2,000 | 20 Sep 2014 | Initial fixed penalty | £100 | |
| 20 Nov 2014 | Second fixed penalty | £200 | |||
| 5 Oct 2014 | £3,000 | 20 Oct 2014 | Initial fixed penalty | £100 | |
| 20 Dec 2014 | Second fixed penalty | £200 | |||
| 5 Nov 2014 | £2,500 | 20 Nov 2014 | Initial fixed penalty | £100 | |
| 20 Jan 2015 | Second fixed penalty | £200 | |||
| 5 Dec 2014 | £3,000 | 20 Dec 2014 | Initial fixed penalty | £100 | |
| 20 Jan 2015 | Second fixed penalty | £200 | |||
| TOTAL | £3,500 | £700 | |||
| Limited to | £3,000 |
Value Construction Limited will be liable to total penalties of £3,700.