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This page only applies to the Construction Industry Scheme (CIS).

This page provides an example of the adjustments made to penalties when the person is new to CIS.

Value Construction Limited was selected for a compliance check in January 2015 because it had included a deduction for payments to subcontractors on its tax return but had not registered as a contractor or filed any CIS returns (CIS300).

Our enquiries establish that it has been paying subcontractors within the scope of CIS since 15 December 2013 and so it should have registered as a contractor and filed CIS300’s for the months ended 5 January 2014 to 5 December 2014. We have found no evidence that the company was deliberately withholding information.

The total of Value Construction Limited’s initial fixed penalties and second fixed penalties cannot exceed £3,000.

Where a return is not filed after 6 and 12 months, the penalties are 5% of the total CIS deductions that should have been included on the return. The minimum penalty of £300 does not apply.

Note that CIS return periods end on the 5th of the month and the filing date is the 19th of the month in which the return period ended. The penalty date is the 20th of the month, being the day after the filing date.

Value Construction Limited is liable for the following penalties to 6 January 2015.

Period ended	Amount of CIS deductions that should have been returned	Date liable to penalty	Name of penalty	Initial & second fixed penalties	6 month further penalties (5% of the amount that should have been returned)
5 Jan 2014	£3,000	20 Jan 2014	Initial fixed penalty	£100	Ìý
20 Mar 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
20 Jul 2014	6 month further penalty	Ìý	£150	Ìý	Ìý
5 Feb 2014	£1,000	20 Feb 2014	Initial fixed penalty	£100	Ìý
20 Apr 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
20 Aug 2014	6 month further penalty	Ìý	£50	Ìý	Ìý
5 Mar 2014	£2,000	20 Mar 2014	Initial fixed penalty	£100	Ìý
20 May 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
20 Sept 2014	6 month further penalty	Ìý	£100	Ìý	Ìý
5 Apr 2014	£3,500	20 Apr 2014	Initial fixed penalty	£100	Ìý
20 Jun 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
20 Oct 2014	6 month further penalty	Ìý	£175	Ìý	Ìý
5 May 2014	£1,500	20 May 2014	Initial fixed penalty	£100	Ìý
20 Jul 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
20 Nov 2014	6 month further penalty	Ìý	£75	Ìý	Ìý
5 Jun 2014	£2,000	20 Jun 2014	Initial fixed penalty	£100	Ìý
20 Aug 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
20 Dec 2014	6 month further penalty	Ìý	£100	Ìý	Ìý
5 Jul 2014	£1,000	20 Jul 2014	Initial fixed penalty	£100	Ìý
20 Sept 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
20 Jan 2015	6 month further penalty	Ìý	£50	Ìý	Ìý
5 Aug 2014	£1,500	20 Aug 2014	Initial fixed penalty	£100	Ìý
20 Oct 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
5 Sep 2014	£2,000	20 Sep 2014	Initial fixed penalty	£100	Ìý
20 Nov 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
5 Oct 2014	£3,000	20 Oct 2014	Initial fixed penalty	£100	Ìý
20 Dec 2014	Second fixed penalty	£200	Ìý	Ìý	Ìý
5 Nov 2014	£2,500	20 Nov 2014	Initial fixed penalty	£100	Ìý
20 Jan 2015	Second fixed penalty	£200	Ìý	Ìý	Ìý
5 Dec 2014	£3,000	20 Dec 2014	Initial fixed penalty	£100	Ìý
20 Jan 2015	Second fixed penalty	£200	Ìý	Ìý	Ìý
Ìý	TOTAL	£3,500	£700	Ìý	Ìý
Limited to	£3,000	Ìý	Ìý	Ìý	Ìý

Value Construction Limited will be liable to total penalties of £3,700.