Construction industry scheme penalties
Construction industry scheme penalties

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Construction industry scheme penalties
  • CIS returns and payment of tax
  • Late filing penalties for CIS returns
  • Penalties for months from 5 November 2011 onwards
  • Penalties for months up to and including 5 October 2011
  • Penalties for late payment of tax withheld under CIS
  • Penalties for inaccurate returns
  • Appealing against penalties

FORTHCOMING CHANGE relating to construction industry scheme (CIS) abuse: Following a consultation that ran until 28 August 2020, Finance Bill 2021 (FB 2021) will include measures to tackle abuse of the construction industry scheme (CIS). FB 2021 will contain four amendments to the CIS rules: a simplification of the rules for deemed contractors, changes to the rules on deductions for materials, a new power for HMRC to restrict CIS set-off claims and an expansion of the scope of penalties. The measures will apply from 6 April 2021. For more detail, see: Tackling Construction industry scheme abuse and News Analyses: Draft Finance Bill 2021—tackling construction industry scheme abuse, Further provisions for draft Finance Bill 2021—Tax analysis—Real estate and Consultation on tackling Construction Industry Scheme abuse.

FORTHCOMING CHANGE: HMRC intends to make wide-ranging changes to the rules on tax penalties, as part of its 'Making Tax Digital' reforms and a wider penalty review, including:

  1. Late submission penalties: Replacing late filing penalties with a new system of late submission penalties using a points-based model—the amount of the penalties has yet to be announced

  2. Late payment penalties: Replacing the current late payment penalties with a hybrid regime of penalties and penalty interest. Half the penalty, which will be an as yet unspecified percentage of the unpaid tax, will arise when a payment is late by 15 days; the second

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