Court rules on online filing penalties

Source: Tribunal | | 11/04/2018

The Construction Industry Scheme (CIS) is a set of special rules for tax and national insurance (NI) for those working in the construction industry. Businesses in the construction industry are known as 'contractors' and 'subcontractors'. The scheme applies mainly to contractors and subcontractors involved in construction.

A recent First-Tier Tribunal decision examined a case, where a limited company in the floor and wall covering business had failed to make monthly returns on time for the period April 2016 – December 2016. There are penalties for late submission of CIS contractor monthly returns. The penalties increase the longer the returns are outstanding. HMRC issued the company with penalty assessments of £3,200 which were appealed. The company appealed on the basis of having a reasonable excuse for making late returns.

The issue at hand centred on changes to HMRC’s policies, which made online filing compulsory from April 2016. The company had previously filed paper returns without issue. However, the process for filing online was exacerbated as the person responsible for making the filings was not IT literate.

The person in question made every effort to resolve this issue with HMRC but was unable to activate the online filing system, partly due to the activation code being sent to the wrong address. The problems increased when the staff member ended up in hospital suffering from stress and anxiety, which may have been partly due to the issue of making the CIS filings. A request for digital exclusion was also rejected.

The Tribunal examined the facts and were clear that the combination of health problems and the inability to file online constituted a reasonable excuse for the defaults.  The penalties were dismissed.



Accountancy service

“Are you feeling confused about how to comply with HMRC’s accountancy requirements?

Read more...

Your business

Your business

Are you a Start-up business? Are you a little confused about the different types of companies? 

Read more...

Virtual Director

Virtual Director

Are you looking to grow your business? A Virtual Financial Director can help you take your business to the next level.

Read more...

Xero

XERO

Ensure that your business has the edge over your competitors and incorporate Xero into your business, today!

Read more...

Latest News

VAT on property service charges
12/12/2018 - More...
A new Revenue and Customs Brief (6-2018) entitled VAT exemption for all domestic

Are you ready for VAT filing changes April 2019?
12/12/2018 - More...
The introduction of Making Tax Digital (MTD) for VAT is fast approaching. From

Is your income approaching £100,000?
12/12/2018 - More...
For high earning taxpayers, the personal allowance is gradually reduced by £1

Search News


Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login