CIS contractors reminded of changes to penalties

Date: 26th August 2011

Construction Industry Scheme (CIS) contractors have been reminded of changes to the penalty system from October.

Newly-registered CIS contractors will face an upper limit to some of the penalties for late monthly returns, while other penalties are less than what is charged under the current system.

What CIS contractors should be aware of is that if they have been charged penalties for filing a late return before October, they may ask HM Revenue & Customs (HMRC) to work out how much the penalties would be under the new rules.

If it is less than the amount charged then they can agree that their penalties should be reduced to this amount.

The penalty could also be lower if contractors have been charged for more than one penalty, if they are charged more than £100 for one monthly return, and if new contractors have been charged penalties for more than one late monthly return.

However, penalties will not be lower in every case, HMRC warns. The minimum penalty for each late monthly return remains at £100.

Posted by Thomas Fletcher