From 6 October 2011, CIS contractor monthly returns will be liable to a new penalty regime:
- £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;
- a 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 further information, see HMRC’s website.