CISR65660 - Late Return Automatic Penalties: Setting or lifting a Penalty Inhibition
| CISR65000 | Information contents | |—————————————————————————————————–|———————-|
This action guide tells you how to set or unset a Penalty Inhibition for a contractor scheme. You should hold one of the CISR Penalty Administrator, CISR Compliance Officer, CISR Compliance Manager or CISR Pursuit Manager roles.
- From the CIS Main Menu you should select the contractor scheme and then select [Maintain Penalty Inhibition] from the menu.
CIS Main menu between 6th to the 29th October 2011.
During this period there will be two separate functions available to you from the CIS Main menu depending on whether you wish to set penalty inhibitions in respect of CIS penalties issued under TMA70/S98A or under FA09/SCH55, these two functions will be;
- Maintain S98a Penalty Inhibition (for CIS penalties issued 06/04/2007 to 28/10/2011)
- Maintain Penalty Inhibition (for CIS penalties issued from 29/10/2011)
From 29th October 2011 the Maintain S98a Penalty Inhibition will no longer be available on the CIS Main menu and it will no longer be possible to set (or remove) any penalty inhibitions for months up to and including 5th October 2011. No further CIS penalties issued under TMA70/S98A will automatically be issued after 28th October 2011.
Setting a penalty inhibition
From the CIS Main menu you will be taken to the ‘Penalty Inhibitions Summary’ window which has two panels. The upper panel lists the scheme name and AO reference, the lower panel displays the following;
- Tax year ending - this will display each of the tax years since the contractor registered for CIS. After 28th October 2011 the earliest tax year displayed will be for the year ended 5th April 2012
- Inhibitions set - this will display the total number of inhibitions set for each tax year
-
Penalties inhibited - this will display the total number of penalties that have been inhibited from being issued for each tax year
- Select the ‘Tax Year Ending’ for the year that you wish to inhibit a penalty or penalties.
You will be taken to a window titled ‘Penalty Inhibitions for Tax Year’ this also displays the number of inhibitions set and the number of penalties inhibited from being issued, but now breaks this down to show the totals for each tax month during the year selected.
In addition a column titled ‘Inactive for period’ is displayed which will show the months for which a period of ‘Inactivity’ has been set by displaying ‘Yes’ alongside the month concerned.
After 28th October 2011 none of the penalties inhibitions set prior to 29th October 2011 will be visible in this function and the earliest month that will now appear in this function will be to 05/11/2011 or the month of registration as a contractor where this is later. Penalty Inhibitions set for months prior to 29th October 2011 will still be accessible from the ‘Inhibitions’ tab within ‘View Customer’.
As the number of future monthly returns for which a future penalty inhibition can be set is restricted to the current monthly return and six future returns, CY+1 year returns will only become visible on the CISR system six months into the current year. If you try to select a monthly return further than six months into the future a warning message will be displayed.
- Select the penalty date against which you wish to set (or unset) a Penalty Inhibition.
You will now be taken to the ‘Penalty Inhibitions for Return Period’ window. If you selected the function ‘Maintain Penalty inhibition’ up to 6th October 2011, or function ‘Maintain S98a Penalty inhibition’ between 6th and 28th October 2011 this will display for you the 13 penalty instances with the filing date for the return shown in brackets under the column titled ‘Filing date’.
If you selected the function ‘Maintain Penalty inhibition’ after 28th October 2011 this will display for you the 4 penalty dates with the filing date for the return shown in brackets under the column titled ‘Penalty type’.
The other columns on the ‘Penalty Inhibitions for Return Period’ window will be;
- Inhibition set - this will indicate ‘Yes’ where a CIS penalty inhibition has been set and is still in place.
- Inhibition reason - will display the reason why the inhibition was set (see below).
- Reviewed - will display ‘Yes’ where the CIS penalty has been reviewed and it is likely that the penalty will never be pursued.
-
Penalty status - this is the current status of the CIS penalty and will be issued, reissued, vacated or withheld.
- select the checkbox alongside each of the penalty date(s) that you wish to update.
Note you can select more than one penalty date at a time however your selections must all be given the same inhibition setting, reason, and penalty reviewed status (see below). If they are different you will need to repeat the process.
- Select the [Update Inhibitions] button.
You will be taken to the ‘Update Inhibitions’ window this displays the same column headings and scheme information as on the previous window.
Follow step (1) immediately below to set a CIS penalty inhibition, to lift a penalty inhibition already set follow step (2) below.
Step 1
To set a penalty inhibition;
- select the [Yes] radio button alongside the entry ‘Inhibition Set.’
- from the drop down menu, select the reason for the penalty inhibition the options are;
- Penalty appeal received (to be used if you wish to inhibit future penalties for a return where penalties already issued have been appealed against)
- Reasonable excuse - Illness
- Reasonable excuse - Bereavement
- Reasonable excuse - IT failure
- Reasonable excuse - Operational
- Reasonable excuse - Other
- Insolvency
- Customer complaint
- Mediated complaint
- Appeal determined - return not required
- HMRC administration error
- Compliance intervention
- Other
You should then consider if in the given circumstances there is any likelihood that you would wish to pursue the CIS penalty in the future. If not;
- select the checkbox to show that ‘This penalty has been reviewed and is unlikely ever to be taken’.
It is not necessary to select this checkbox when the inhibition is set, and this point can be considered at a later date.
In cases where a reasonable excuse has been accepted as the reason why the CIS Monthly return has not yet been submitted, you must inform the customer in writing of the date by which the monthly return should subsequently be submitted to HMRC without the CIS penalty being pursued, see CISR65090 for further information.
- Select the [Accept] button at the bottom of the window.
You will be returned to the Inhibitions Summary on the ‘Penalty Inhibitions for Return Period’ window and any changes made will be displayed.
Step 2
To lift an inhibition already set you must
- select the [No] button alongside the entry ‘Inhibition Set’.
The field beside ‘Reason’ will now become ‘greyed out’. If the checkbox indicating ‘The penalty has been reviewed and is unlikely ever to be taken’ had been set you should unset this checkbox where you wish the penalty to be issued and pursued. If it is decided to remove the inhibition you should send a letter to the customer informing them that any penalties previously inhibited will now be released.
- Select the [Accept] button at the bottom of the window.
You will be returned to the Inhibitions Summary on the ‘Penalty Inhibitions for Return Period’ window and any changes made will be displayed.
If however the updates you have made include the removal of an inhibition resulting in the immediate issue of a previously inhibited penalty the ‘Penalty Review window’ will be presented to you. You should then check the ‘total number of penalties to be issued for this return’ and ‘the cumulative number of penalties to be issued for this scheme’, if you wish to release all the penalties to SAFE for issue.
- Select the [OK] button at the bottom of the window.
If you do not wish to proceed with the release of these CIS penalties to SAFE you should;
- select the [Cancel] button
all changes made and any penalty inhibitions lifted will then be lost.