Era of CIS mega penalties ends
HMRC has capped penalties for late returns of payment information to contractors under the Construction Industry Scheme, reports Nick Huber.
The change will be welcomed by tax advisers whose clients faced penalties in the tens of thousands in some cases. Some AccountingWEB subscribers have claimed that the taxman is prepared to waive some of the heftier fines under the old penalty system.
The CIS stipulates how payments to subcontractors for construction work must be handled by contractors in the construction industry. The scheme applies mainly to contractors and subcontractors in mainstream construction work.
Contractors must register with the scheme and send monthly returns to HMRC giving details of all payments to sub-contractors under the CIS. Contractors should also check whether their subcontractors are registered with HMRC and are submitting monthly returns.
The scheme has proved controversial with contractors. Since 1 October, penalties have been capped at £3,000. Before then, however, penalties for failing to register with the scheme were £100 each month and some penalties could amount to tens of thousands of pounds, according to AccountingWEB tax editor Rebecca Benneyworth.
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I can confirm that the
I can confirm that the success was real and am happy to let anyone interested have a copy of the letter used to appeal against the penalties - I have one very happy client:-)
Penalties
Putting forward a sensible approach to the system of penalties is long overdue. At the moment they are simply enacted by the legislature without sufficient (or perhaps any) thought to the consequences.