If any of your CIS returns are just one day late, HMRC will charge an initial fixed penalty of £100.

If they still haven’t received that return:

• 2 months after the date it was due, a second fixed penalty charge of £200 will apply.
• 6 months after the date it was due,  a further penalty of £300 or 5% of any liability
• 12 months after the date it was due a further penalty – the amount of this penalty will depend on why your return was late

The amount they will charge will be either £300 or 5% of any liability to make payments, or a ‘higher’ penalty of:

• up to 100% of any liability to make payments
• a minimum penalty of £1,500 or £3,000

A ‘higher’ penalty will be charged if HMRC find out that you deliberately withheld information.

When a contractor first files a CIS return, if earlier CIS returns are also late, HMRC may ‘cap’ the total amount of the £100 and £200 fixed penalties at a maximum of £3,000 for some returns.

Where a CIS return only relates to subcontractors registered for gross payments, there’s no liability to make payments but penalties still apply. A penalty of £300 applies when the return is 6 months late, and when the return is 12 months late HMRC charge £300 or £1,500 or £3,000 depending on why your return was late.

We are able to assist with all construction related issues, including CIS rebates for Limited companies and Sole Traders.

Contact us today, call 01277 223 278.