Act now to avoid new Construction Industry Scheme (CIS) Penalties

New CIS Penalties

Business Link is reminding contractors across Leicestershire about the important changes to penalties for late Construction Industry Scheme (CIS) returns which come into effect next month.

From 6 October 2011, CIS contractor monthly returns will be liable to a new penalty regime:

  • a £100 fixed penalty 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.

 For more information, contact Business Link on 0845 058 6644

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