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New penalties: CIS case
Posted on: 22 Nov, 2011 08:05:28 pm

Contractor registered under CIS does not send returns due on 19 January and 19 February showing total deductions of £5,000 and £8,000 until 14 October 2012. Return due on 19 January will incur a penalty of £100. When it fails to show up on 19 March, HMRC will send contractor a further penalty of £200. After six months, on 19 July, it will issue a further penalty of £300 – making a total of £600 for the January return.

HMRC will also send a £100 penalty for the late February return and a further £200 when they don't get that return by 19 April. A six-month penalty of £300 will be added when the return is not received by 19 August, making a total of £600 for this return.

On receipt of the contractor's returns in October 2012 HMRC will check for any increase of the tax-geared penalties. As 5% of the £5,000 subcontractor deductions on the January return are £250, HMRC doesn’t adjust the £300 penalty that the contractor was sent shortly after 19 July. But 5% of the £8,000 subcontractor deductions shown on the February return equals £400. As HMRC sent the contractor a penalty of £300 after 19 August, it will send a further penalty for £100.

Source: HMRC

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