ECH21255 - CIS from 06-04-07 - Incorrect Monthly Returns
Section 98A(4) TMA 1970 provides a duty geared penalty for fraudulently or negligently submitting an incorrect return for the returns due to be filed by 19t h March 2009 ECH21050.
The maximum penalty before abatements is an amount equal to the difference between the amount returned and the amount which should have been returned.
For example, a form CIS300 which returns £8,000
- where it is later demonstrated that
- £14,000 of CIS deductions should have been returned
- attracts a maximum penalty before abatements of £6,000.
Some practical examples of calculating penalties for incorrect returns are attached.
Because the CIS300 return is a monthly return it is important that you
- give the contractor advice on how to correct mistakes at the earliest opportunity
This will assist the contractor in making sure that subsequent returns are correct.
Note that these penalties are based on 100% of the tax difference or the tax underpaid and are subject to Article 6 of ECHR (ECH8026).
You should
- provide HRA advice and
- issue factsheets EC/FS3 & EC/FS4
to the contractor at the earliest opportunity (ECH8027).
If it has been necessary to issue formal determinations consideration should be given to also issuing penalties (ECH21135) at the same time.
Schedule 24 of FA2007 applies to returns due to be filed on and after 19th April 2009. Refer to the Compliance Handbook for more information.
