CIS Late Filing Penalties

Late filing penalties for the Construction Industry Scheme (CIS)

This is what can happen when a monthly CIS return is more than 12 months late. A contractor’s ‘liability to make payments’ is the amount of any CIS deductions they should have made from payments to subcontractors and then shown on their monthly return.

The penalties we may have already charged

Because you did not send us a monthly CIS return on time HMRC may have already
charged you the following penalties:
  • an initial penalty of £100 on the day after the date your return was due
  • a second penalty of £200 two months after the date your return was due
  • a ‘further penalty’ of 5% of the liability to make payments, or £300 (whichever was the higher) after your return was six months late
  • a second ‘further penalty’ of 5% of the liability to make payments, or £300 (whichever was the higher) after your return was 12 months late.


The different behaviours

Non-deliberate- This is where the tax payer didn’t know that, by failing to file your return on time,
information was being withheld from HMRC.

Deliberate- This is where the tax payer knew that, by failing to file your return on time, information was
being withheld from HMRC.

Deliberate and Concealed - This is where the tax payer knew that information was being withheld from HMRC and you took additional steps to conceal this. This is the most serious type of failure and attracts
the highest penalties.


What happens if you have a reasonable excuse

HMRC will not charge any penalties for filing your return late if you had a reasonable excuse for doing so as long as the tax payer then filed your return without delay once the reasonable excuse had ended.

A reasonable excuse is normally an unexpected or unusual event that is either unforeseeable or beyond the tax payer’s control. What is or is not a reasonable excuse depends on the individual’s abilities and
circumstances. Those abilities and circumstances may mean that what is a reasonable excuse for one tax payer may not be a reasonable excuse for another.

If you require further information in relation to this aspect or any issues covered by this aspect, please contact our office on 020 8768 5628.