CIS Accountants – CIS Late Filing Penalties

For contractors and subcontractors in the construction industry, understanding the rules around the Construction Industry Scheme is essential to avoid CIS late filing penalties. CIS accountants specialize in managing compliance with this scheme, ensuring that businesses file the required monthly returns and pay the appropriate taxes on time.

CIS late filing penalties can add up quickly, making it crucial for construction businesses to stay up to date with their CIS obligations. In addition, you should be aware there are penalties for providing incorrect information.

CIS Late Filing

If you operate in the construction industry you must file a return to report the deductions you have made from your subcontractors every month. The period runs from the 6th of the month to the 5th of the following month and you have 14 days to make the return.

For example, for the period from the 6th of May to the 5th of June, you must file the return by the 19th of June. It is still possible to file paper versions of the form, but as with most HMRC forms they can also be filed electronically and this will likely be mandatory in the future.

The payment of the CIS deductions is made at the same time as your PAYE payments and has the same deadlines as described above.

You must make a return every month even when no deduction has been made: if no deductions have been made then you must file a nil return. The penalties for failing to file the monthly return are severe and are as follows:

• 1 day late: Fixed penalty of £100 (even if you are making a nil return)
• 2 months late: Fixed penalty of £200 (again, this also applies to nil returns)
• 6 months late: £500 or 5% of the CIS due, whichever is higher.
• 12 months late: £300 or 5% of the CIS due.

These penalties are cumulative, so if you are 12 months late the penalty is a minimum of £1,100. The maximum penalty is capped at £3,000.

Penalty charges may be issued for missed payments of C.I.S.

• Missing one payment in a tax year there is no penalty, as long as the payment is less than six months late.
• Missing two to four payments, a 1% penalty is issued (of the PAYE due).
• Missing five to seven payments, the penalty is 2%.
• Missing eight to ten payments, the penalty is 3%.
• Missing eleven or more payments, penalties of 4% apply.

Late Payment

CIS is paid at the same time as PAYE and follows the same payment pattern. The same penalty and interest regime apply as outlined above.