Compliance checks: penalties for CIS payments or returns connected to deliberate non-compliance — CC/FS96

This factsheet tells you about the penalties we may charge if we’ve issued a determination under either section 62A or 62B of the Finance Act 2004 for the Construction Industry Scheme (CIS).

This factsheet is one of a series. For the full list, go to GOV.UK and search ‘HMRC compliance checks factsheets’.

We may charge a penalty if a person or company makes a payment for construction operations, or claims a CIS credit in a return, and knew or should have known it was linked to deliberate non-compliance by a connected party.

You can avoid a penalty by making sure your business doesn’t become involved in any transactions connected to CIS deliberate non-compliance.

You should review your assurance and due diligence practices and consider strengthening them to reduce your exposure to fraud and risk.

For more information about labour supply chain assurance, go to GOV.UK and search ‘Help with labour supply chain assurance — GfC12’.

The penalty is based on the amount we determined you were liable to under section 62A or 62B of the Finance Act 2004. We’ll send you a notice of determination showing this amount.

The amount of the penalty will be 30% of the determined amount. For example, if the determination was for £1,000, then the penalty would be £300.

The amount a penalty may be reduced will depend on the facts and circumstances of each case. We’ll consider things like if you: