New CIS - Late returns reminder letter - IDMS16(F)

Questions and Answers


Some questions and answers about the monthly return reminder letter - IDMS16(F) - that we have sent to some contractors

Contents:

Q. Why have I been sent this letter?

A. We have sent this letter out to contractors who, according to our records, had not sent in the latest, or, an earlier, contractor monthly return in sufficient time to reach us by its due date (the due date for all contractor returns is 19th of the month – 14 days after the end of the tax month to which it relates).

Q. I have sent in my return (in the last few days)

A. If you have sent it in the last few days, we may have received it after the letters were produced and issued. Please be aware, for future months, that the due date is the 19th of the month in which it is due.

Q. I sent my return to reach you before the 19th of the month

A. If you believe the return was sent in sufficiently early to have reached us by 19th of the month in which it is due, please telephone the CIS Helpline to confirm when the return was received by HMRC, with details of where and how it was sent to us. The CIS Helpline telephone number is 0845 366 7899.

Q. I sent in my return but you sent it back because it wasn’t signed (or I used a photocopy)

A. You are required to submit a signed return by the 19th of the month. If it isn’t signed (or you have used a photocopy) we must send it back to you for your signature or completion on the proper form. If it then comes in after 19th it is late. It is your responsibility to get a fully completed and signed return to us by the 19th of the month.

Q. The Contact Centre (or my local Office) told me to use photocopied continuation sheets (or copies from the internet), which I did, and you then sent the return back to me as being unacceptable. That’s why it was late.

A. If we told you that a return including photocopied continuation sheets (or copies from the internet) was acceptable, please accept our apologies. We will have accepted the return on that basis for this month but would ask you to please endeavour to use the official forms in future. We are making changes to our process to ensure that you have the right forms to use in future months.

Q. Why have you told me that a return for the stated month is outstanding when I first registered as a contractor after that month-end date?

A. We are very sorry to hear that we have sent you a contractor monthly return for a period before you started taking on subcontractors. You should not have received this return, nor the subsequent reminder. Please accept our apologies. Please telephone our CIS Helpline on 0845 366 7899 to let us know that you have received a return for a period before you registered as a contractor.

Q. Although I recently registered as a contractor, I haven't yet paid any subcontractors. Do I need to complete a return yet?

A. Strictly speaking, until you actually pay your first subcontractor, you do not have to complete a monthly return. However, when you register as a contractor, we have to assume that you are about to start paying subcontractors and our system will send out the next monthly return to you. Please telephone our CIS Helpline on 0845 366 7899 to let us know that you have received a return for a period before you have paid any subcontractors.

Q. I have already told you that I won't be paying subcontractors for some months. Why have you sent me a reminder for a return that is not due?

A. You should not have received a return (or reminder) for any months that you have already told us that you won't be paying subcontractors. Clearly, something has gone wrong here. Please telephone our CIS Helpline on 0845 366 7899 so we can sort this out for you.

Q. Will there be a penalty for sending in the return late?

A. Not this time. As the letter explains, we will not be charging penalties on any late returns received before 19 October 2007. However, a return sent in past its due date will still count towards your compliance record when we look at whether you can still be paid gross as a subcontractor. (See the next question and answer - Will sending a return in late be counted against me?).

Q. Will sending a return in late be counted against me?

A. Yes, even during the period from now until 19 October, when we won’t be charging penalties for late returns, we will still count the late returns towards your compliance record, if they fall within the 12 month review period, when we look at whether you can still be paid gross as a subcontractor. However, we will ignore up to three late returns (each up to 28 days late) in any 12 month period when considering whether or not to take away your gross payment status. But, a single late return, over 28 days late, will result in loss of your gross payment status.

Q. How many late returns can I make before I lose my gross payment status?

A. We will ignore up to three late returns (each up to 28 days late) in any 12 month period when considering whether or not to take away your gross payment status. However, a single late return, over 28 days late, will result in loss of your gross payment status.

Q. How can I appeal?

A. There is nothing to appeal against at the moment, because the late return has no immediate consequences. We are letting you know that, from 19 October 2007, late returns will incur penalties. If, sometime in the future, we tell you that you are to lose your gross payment status, we will also tell you how and where to appeal. If you believe you have grounds for appeal against our decision, you must write to us then giving your reasons for our consideration.

Q. I want to write to you about this now. Who do I write to?

A. You do not have to write to us now (See the previous question and answer - How can I appeal?). However, if you must write now, you should write to the Employers Section at the HMRC office that deals with your contractor/employer scheme.

Q. What if I lose my gross payment status as a result of you telling me to use photocopied (or downloaded) continuation sheets?

A. It is unlikely that use of photocopied continuation sheets will lead you to send in the return late on four or more occasions (or once, more than 28 days late). However, you have a right of appeal if we tell you we are going to take away your gross payment status. Where this happens and you believe you did everything in your power (or did what we told you to do) to submit the return(s) on time, please tell us when you appeal and we will give your explanation sympathetic consideration.

Q. Will you confirm in writing what you’ve just said about giving me sympathetic treatment?

A. We are unable to write to you individually on this point but you have confirmation of our policy on this matter within this Q&A.

Q. Why didn’t you send me a reminder - IDMS16(F) - letter this month (or, last month, as appropriate) as I know I missed the deadline?

A. We planned to send reminders to those contractors submitting their returns late at intervals between May and October before penalties were introduced but not necessarily every month. We haven’t sent a reminder letter every month.

Q. What are you doing about getting sufficient supplies of original forms to contractors?

A. We are including some extra continuation sheets with the August paper returns that contractors should receive by 5 August. But, if you need more now, please ask our CIS Helpline to send you some. Telephone 0845 366 7899.

Q. What is the statement about interest on the back of the letter? Is interest being charged?

A. No interest is being charged. Please ignore the statement on the back of the letter.