I have a client in the construction industry. He has a few outstanding self assessments which I'm doing for him, but on examining his paperwork he seems to have been paying sub contractors (plumbers, joiners etc) but has not registered for CIS.
My normal advice is make a voluntary disclosure to HMRC and pray. Does anyone have any idea what level of fines will/could be imposed?
I think, or should i say definatley was £100 fine for each late submition , then £100 per month for each late payment untill it was paid. IE so if you submit jan 2012, feb 12, march 12 now you would recevive £300 fines for late submmitions of the forms and about £400 pounds fine for late payments. One of my clients ended up with around £12,000 worth of fines for this when he didn't post the forms and i was on maternity leave.
My advice would be to register him imediatly for this tax year. there are special areas for working out of the scope of the CIS scheme which i'm sure your aware of. this could come in usefull for the previous years. Lots of builders/plumbers etc are bonifide labour's and don't have CIS taken. But I still think these need to be checked upon every payment. Its a tough one because for previous years he hasn't deducted the tax and paid the sub-contractors in full so if he were to submit figures to HMRC he would end up owing money to them that he had already paid the contractors. I work with lots of builders and they are just not aware of how important it is.
I was working for a huge building firm a while ago now so it may have changed and my memory is a little rusty. I hope it helps in some way and i haven't just told you what you already know :S But the important thing is to register him ASAP x
I believe HMRC have now capped the penalties for contractors to a maximum of £3000 per year for late returns but I'm not sure if this includes late payments too??
