Penalties

The whole system is backed up by a series of penalties. These cover situations in which an incorrect monthly return is sent in negligently or fraudulently, failure to provide CIS records for the Revenue to inspect and incorrect declarations about employment status. However, two further penalties will be much more common on a day to day basis:

• for failure to send in the monthly return there will be a penalty of £100 per 50 subcontractors (or part thereof) per month
• for failure to provide a subcontractor with a ‘payslip’, a penalty of up to £300, plus a further penalty of up to £60 per day for continuing failure.

Clearly procedures and controls will be vital in avoiding these penalties.