Beware of enormous HMRC tax penalties involved in not complying with Construction Industry Scheme rules and regulations.
KinsellaTax have Construction Industry Scheme specialists with the experience and in-depth knowledge required to tackle and deal with every aspect of your CIS tax investigation enquiries.
To speak to one of our Construction Industry Scheme specialists call us anytime, day or night, on 0800 471 4546.
It is easy to fall foul of the regulations in place for the Construction Industry Scheme and, therefore, easy to incur HMRC tax penalties.
You need KinsellaTax to settle any CIS tax investigation.
As shown below, HMRC issue massive tax penalties for those who fail to comply with Construction Industry Scheme rules and regulations.
CIS Penalties
The Construction Industry Scheme tax system is backed up by penalties.
For help reducing penalties received from HMRC during a Construction Industry Scheme investigation call KinsellaTax NOW on 0800 471 4546
Penalties cover situations such as:-
- Incorrect monthly returns submitted fraudulently or negligently;
- Failure to provide Construction Industry Scheme records for HMRC to inspect; and
- Incorrect declarations regarding employment status.
There are two penalties that are more likely to be imposed in a Construction Industry Scheme tax investigation:
- Failure to submit monthly return – penalty of £100 per 50 subcontractors per month; and
- Failure to provide subcontractors with a ‘payslip’ – penalty of £300 plus further penalty of £300 for continuing in this failure.
To avoid tax penalties for failing to comply with HMRC rules, contact KinsellaTax for advice in all Construction Industry Scheme matters.
Below is a table showing examples of Construction Industry Scheme penalties for failing to submit monthly returns:-
| Number of subcontractors on the return |
Automatic penalty for a late return (including ‘nil’ returns) |
Additional penalty for each extra month late (continues up to 12 months) |
Extra final penalty where a return is over 12 months late |
|
|
|
|
| 0 – 50 |
£100 |
£100 |
£3,000 |
| 51 – 100 |
£200 |
£200 |
£3,000 |
| 101 – 150 |
£300 |
£300 |
£3,000 |
| 151 – 200 |
£400 |
£400 |
£3,000 |
The tax penalty will increase, depending on the number of subcontractors on the return.
If there were 500 subcontractors, for example, the late return penalty will be £1,000.
‘Nil’ returns will also be liable for a penalty of £100 per month if it is not submitted or submitted incorrectly or fraudulently.
Can’t sleep at night for worrying about whether you have complied properly with HMRC’s strict Construction Industry Scheme regulations?
Call KinsellaTax’s Construction Industry Scheme experts immediately on 0800 471 4546.
Listed below are additional tax penalties that HMRC may charge in relation to the Construction Industry Scheme follwoing an enquiry:
| Offence |
Penalty |
|
|
| Application for a Certificate – knowingly or recklessly making a false statement or providing a false document |
Not exceeding £3,000 |
| Failure to notify a change in control of the company |
Initial penalty of £300 and daily penalties not exceeding £60 per day |
| Failure to obtain/submit CIS24 vouchers |
Initial penalty of £300 and daily penalties not exceeding £60 daily |
| Failure to submit CIS23 vouchers |
Initial penalty of £300 and daily penalties not exceeding £60 daily |
| Submission of inaccurate or incomplete CIS23 vouchers |
Not exceeding £3,000 |
| Unlawful disposal or possession of CIS documents |
Not exceeding £3,000 |
| Failure to inspect a registration card |
Not exceeding £3,000 |
| Submission of inaccurate or incomplete CIS25 vouchers |
Not exceeding £3,000 |
| Failure to surrender a certificate |
Initial penalty of £300 and daily penalties not exceeding £60 daily |
| Failure to submit end of year return (first 12 months) |
Penalty of £100 per month or part month for each batch or part batch of the 50 subcontractors on the return |
| Failure to submit end of year return (after 12 months) |
Penalty not exceeding amount payable at 19th April after end of tax year |
| Incorrect end of year returns |
Penalty not exceeding the difference between the amount returned and the correct amount |
| Failure to produce records |
Initial penalty of £300 and daily penalties not exceeding £60 daily |
|
Non-compliance with Construction Industry Scheme rules and regulations has severe implications including strict tax penalties and recovery of tax from contractors.
Give yourself the best chance of winning a Construction Industry Scheme appeal against HMRC by calling 0800 471 4546.
Records
Under Construction Industry Scheme rules and regulations HMRC requires that contractors maintain full records of subcontractors’ details, payments to subcontractors and whether the subcontractors have been verified.
These records need to be kept for at least 3 years after the end of the tax year to which they relate.
Under Construction Industry Scheme rules and regulations HMRC are entitled to inspect these records.
Record Inspection by HMRC
If a contractor receives a request from HMRC to inspect records it is important to seek professional advice before records are inspected under the Construction Industry Scheme.
In a Construction Industry Scheme record inspection HMRC will not just be looking to see that the contractor has maintained proper records but they will also look at:-
- The status of subcontractors to see whether they should be re-classified as employees
- Whether the correct rate of tax has been deducted from payment. If not, HMRC may seek to recover any under-deduction of tax from the contractor
- Whether the contractor is operating the Construction Industry Scheme correctly. If not, HMRC can seek to hold the contractor liable for any under-deduction of tax.
It is very important to seek professional Construction Industry Scheme advice in this situation.
KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully experienced in HMRC Tax Investigations and Construction Industry scheme tax investigations.
For representation and advice on any aspect of the Construction Industry Scheme, call 0800 471 4546to speak to one of our Construction Industry Scheme specialists.
