HMRC Announces Penalty Changes Related to Contractors Monthly Returns
On 5 September 2011, HM Revenue & Customs announced that changes to the penalties for late or non-filing of a contractor's monthly return within the Construction Industry Scheme are to come into force today (6 October 2011).
The first return falling within the new penalty regime will be the return for the month ending 5 November 2011. The following penalties will apply to that return and all subsequent months' returns that are not filed or filed late:
- A fixed penalty of £100 immediately a return is late.
- A second, fixed penalty of £200, two months after the filing date if the return is still outstanding.
- If the return is still outstanding six months after the issue of the first penalty, a tax-geared penalty is charged which is the greater of £300 or five per cent of the amount of deductions shown on the return.
- If the return is still outstanding 12 months after the issue of the first penalty, a further tax-geared penalty is charged which is the greater of £300 or five per cent of the amount of deductions shown on the return. Higher levels of penalty apply where, as a result of the failure to file the return on time, information has been deliberately withheld.
Interest will be chargeable on any penalty paid late. If you have any queries about the changes to penalties, please contact Justine Riccomini on 0131 558 5800 or email justine.riccomini@chiene.co.uk