Construction Industry Scheme (CIS) Penalties

HM Revenue & Customs (HMRC) now charges penalties for all Construction Industry Scheme (CIS) returns not received by the due date.

Any return not received from contractors by the due date will be liable to a fixed penalty of £100.00 and a further penalty for every additional month that the return remains outstanding.

Doug Tweddle, HMRC Senior Responsible Officer for the CIS Reform Programme, said: "It's important that contractors operating the CIS scheme make sure that all their outstanding returns are sent in..

"We would obviously prefer not to have to issue penalties, but having had 6 months to get into the routine of sending returns in by the 19th of each month, contractors will now face penalties if they fail to do so".

"It's important to remember that nil returns must be submitted too - to make life easier, this can be done with one phone call".

RETURNS

Although the new CIS was introduced last April, the penalty regime was deferred for 6 months so contractors could get used to the requirements of the new scheme, in particular the need to submit returns on a monthly basis.

To raise awareness, HMRC issued warning letters to those who have failed to file returns, including penalty warning fliers, mailing out information to all contractors and agents, and in some cases ringing non-filers personally.

HMRC has also worked with industry bodies to ensure that they have made their members aware of the penalty regime.

The new Construction Industry Scheme (CIS) is designed to secure payments from subcontractors on account of their final tax and national insurance liabilities.

The changes make it possible for key CIS transactions to be carried out online or over the phone (as well as on paper).

FURTHER INFORMATION

For further information please contact the New CIS Helpline on Tel: 0845 366 7899 (open between 8.00am - 8.00pm Monday to Sunday), Minicom: 0845 366 7894 or visit the HMRC website at: www.hmrc.gov.uk/new-cis

The HMRC has also produced guidance for contractors on submitting their monthly returns, which can be viewed at: www.hmrc.gov.uk/new-cis/contractor-monthly-return.htm

To download CIS factsheets from the HMRC in alternative languages (Albanian, Bulgarian, Czech, Hungarian, Latvian, Lithuanian, Polish, Portuguese, Romanian, Russian, Slovakian and Turkish) please visit: www.hmrc.gov.uk/new-cis/languages.htm

To view the Employer Status Indicator Tool please visit the HMRC website at: www.hmrc.gov.uk/calcs/esi.htm