A new CIS penalty regime applies from 6 October 2011. 

A £100 fixed penalty applies if the return misses its due date (the 19th of each month).

  • A second £200 fixed penalty if a return is two months late.
  • A tax-geared penalty if the return is not filed six months after its due date – the greater of 5% of any deductions shown on the return or £300.
  • A second tax-geared penalty if the return is still outstanding after 12 months – the greater of 100% of any deductions or £3,000 if withholding of information was deliberate and concealed; the greater of 70% or £1,500 if it was deliberate but not concealed; or the greater of 5% or £300 for cases where information was not withheld.
  • An upper limit (‘cap’) on the amount of fixed penalties charged to new contractors that have not filed their first returns on time; and
  • Interest on any penalty paid late.

The first return affected will be for payments made to subcontractors in the month ending 5 November 2011, which is due on 19 November 2011.

Transitional provisions apply to penalties levied between 18 Nov 2010 to September 2011. These are worth checking because a refund may be due.

Worked example (subscribers only): click here

At a glance


Penalty per return

Miss filing deadline


2 months


6 months

5% of tax due or £300, if greater

12 months

5% or £300 will apply, unless the taxpayer is held to be deliberately withholding information that would enable HMRC to assess the tax due.

Reductions apply for prompted and unprompted disclosures and behaviours of "telling, giving and helping".

12 months & taxpayer deliberately withholds information

Based on behaviour:

  • deliberate and concealed withholding 100% of tax due, or £3,000 if greater.
  • deliberate but not concealed 70% of tax due, or £1,500 if greater.


12 months: gross paid recipients

Based on behaviour:

  • deliberate and concealed withholding £3,000.
  • deliberate but not concealed £1,500.