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HMRC Warns Contractors Over Penalties For Late Returns

by Jason Gorringe, Tax-News.com, London

09 October 2007


HM Revenue & Customs (HMRC) has announced that from October 19, it will start charging penalties for all Construction Industry Scheme returns not received by the due date, namely the 19th of every month. This includes returns due from the start of the new scheme between May and September, including nil returns.

After this date, any return not received from contractors by the due date will be liable to a fixed penalty of GBP100 and a further penalty for every additional month that the return remains outstanding, the UK tax authority warned.

Doug Tweddle, HMRC Senior Responsible Officer for the CIS Reform Programme, explained that:

"It's important that contractors operating the CIS scheme make sure that all their outstanding returns are sent in by 19 October, to avoid a penalty. We would obviously prefer not to have to issue penalties, but having had 6 months to get into the routine of sending returns in by the 19th of each month, contractors will now face penalties if they fail to do so."

"It's important to remember that nil returns must be submitted too - to make life easier, this can be done with one phone call."

He concluded: "It's not too late for contractors to get their filing obligations up to date and avoid penalties, but they must act now."

Although new CIS was introduced on 6 April 2007, the penalty regime was deferred for 6 months, until October. This was so that contractors could familiarise themselves with the requirements of the new scheme, in particular, the need to submit returns on a monthly basis. To avoid becoming liable for a penalty, all returns due since April 2007 must be received by HMRC by 19 October.

To raise awareness of the deadline, HMRC is issuing warning letters to those who have failed to file returns, including penalty warning fliers, mailing out information to all contractors and agents this month, and in some cases, ringing non-filers personally. HMRC has also worked with industry bodies to ensure that they have made their members aware of the penalty regime.


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