Construction Industry Returns & Penalties

If you're a contractor under the Construction Industry Scheme (CIS) you'll need to send HM Revenue & Customs (HMRC) a return each month. Your monthly returns tell them about any payments you've made to your subcontractors during the last tax month.

HMRC have prepared a new guide explaining what will happen if you send a return in late. The guide is available here. Follow link

In short the penalties are as follows

Length of delay	Penalty you will have to pay
1 day late	A fixed penalty of £100. This applies even if your return has no subcontractors on it - a nil return.
2 months late	A fixed penalty of £200. This applies even if your return has no subcontractors on it - a nil return.
6 months late	£300 or 5% of the CIS deductions shown on the return, whichever is the higher. This is as well as the penalties above.
12 months late	£300 or 5% of the CIS deductions shown on the return, whichever is the higher.

In serious cases you may be asked to pay up to £3,000 or 100% of the CIS deductions shown on the return, whichever is the higher.

These are as well as the penalties above.

The advice from Walker Thompson is to diarise forward all due dates and to use online facilities to complete the returns. A Nil Return still has to be sent when nothing is due otherwise the penalties will still apply.