This article considers the common penalties that businesses and employers may face in connection with subcontracting and payroll operations.
In some instances, there are grounds for reduced penalties on the basis of ‘reasonable excuse’ but this is complex and beyond the scope of this article.
CIS late filing penalties
Monthly CIS300 forms should be filed 14 days after the end of the relevant tax month, i.e. 14 day from the 5th day of each month.
From 19 October 2007 automatic penalties apply for late CIS300 forms including ‘nil’ returns. Failure to file returns on time will result in penalties, as follows:
|Number of subcontractors on return||Automatic penalty for late return||Penalty per extra month delay (continues up to 12 months)||Fixed penalty where return over 12 months late|
|0 – 50||£100||£100||£3,000|
|51 – 100||£200||£200||£3,000|
CIS late payment surcharge
If a contractor fails to pay CIS tax to HM Revenue & Customs by the due date then it will be liable for a late payment surcharge based on the number of consecutive delayed payments with up a maximum surcharge of 0.83% of the monthly CIS tax paid late.
If you have any queries then please call or email me.
This article is for discussion purposes only and does not represent advice on which you should act without consulting a professional as tax legislation is complex and changes frequently.