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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).

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

Lateness

Penalty per return

Miss filing deadline

£100

2 months

£200

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.