Skip to content

Tag: New CIS

Happy Birthday, New CIS!

The New Construction Industry Scheme will be officially one year old in two weeks; on April 6th 2008. After a very shaky start with plenty of mass confusion, hysteria and technical glitches, have HM Revenue & Customs (HMRC) and the construction industry finally gotten their systems “bedded down” for new CIS compliance or are there still problems?

UK construction companies expected to pay £47 million in late filing penalties

A recent article AccountingWeb reveals some rather interesting statistics on the CIS penalties for late monthly returns that UK Construction Companies have racked up since last October:

Rebecca Benneyworth writes:

The number of penalty notices issued for late CIS monthly returns are shown as:

  • October 2007: 35,919 (> £3.5M)
  • November 2007: 44,921 (> £4.4M)
  • December 2007: 37,618 (> £3.7M)

She adds, “So a total of 118,458 notices were issued in a three month period, bringing in fines of at least £11.8 million (as the minimum penalty is £100). Assuming that these three months are representative of a normal quarter, this would bring an annual yield from penalties for the new CIS 300 to over £47 million.”

Source: AccountingWeb / Hansard

Although we don’t know how many of these automatic penalties were issued in error (and hence would be invalidated under an appeal), we do know that the standard fine is £100, and the serious fine as high as £3,000 per subcontractor per month, which suggests a yield from just the monthly return of £47 million per year.