CIS penalties are about to start

Now that the new CIS (Construction Industry Scheme) has been running for 6 months, HMRC will start to charge penalties for non-compliance with the scheme.

Under the new rules, contractors are required to make a monthly CIS return to HMRC within 14 days of the end of the CIS month (which always ends of the 5th of the month).

As from 19 October, penalties will be charged for late submission of monthly CIS returns, even if they are nil returns or returns for an earlier month. It is therefore important that you make sure that CIS returns for all months up to 5 October 2007 have been filed and received by HMRC by 19 October.

The penalties are charged for each missing month, at a rate of £100 per month. Therefore, not filing any returns for 3 months can incur late filing penalties of £600 (£300 for month 1, £200 for month 2 and £100 for month 3).

You can file a nil return for any month by calling HMRC on 0845 366 7899 and selecting option 4.