Construction Industry Scheme - penalties post 6 April 2015 for nil returns

From 6 April 2015 an amendment was introduced to the CIS system, so that the requirement for a contractor to make a return to HMRC even if the contractor has not made any payments in a tax month will be removed.  However, contractors may still make a voluntary nil return, but are no longer obliged to do so.

One of our client's did not submit a return for the month ended 5 May 2015, as no payments to subcontractors had been made in that tax month.

A late Filing Penalty Charge has been issued.

Having now investigated the position on the the .GOV website this states:

"You'll get a penalty if you miss the deadline for filing returns, including "Nil Notifications"

The penalty will be cancelled if you let HMRC know that you didn't pay any subcontractors that month".

So the penalty has to be appealed, or if not technically appealed, correspondence has to be entered into.

I cannot see how this is a simplification or removing burden from businesses. If anything it is making matters more complicated and I cannot think that this was the intention of the measures introduced by the government.  

It seems to me that it is going to be easier to continue to submit a nil return, rather than no return: which is exactly where we were before the change in the rules. 
  • Please would you be so kind as to state precisey where on the .gov website it says " .... The penalty will be cancelled if you let HMRC know that you didn't pay any subcontractors that month".
  • This happened to me for a late nil return for the month of May and then June + an extra £100.00 fine for not paying the first fine on time making it a grand total of £300.00 which i then appealed.I asked them to explain to me just what is the cut off point for the penalty-is it midnight on the 18th or the 19th of the month.I then received three different letters ,one for each fine saying that the fines had been amended and that nothing was due.I did not know of this new ruling and if i hadn`t gone into correspondece with them i would have been £300.00 out of pocket,i did pay the £100.00 late fine payment the day before i received the letters saying that nothing was due so i hope they will reimberse me with that.I wonder just how many people have paid these late payment fines without knowing about this ruling just as i did and did not enter into correspondence with them-seems like it is all a bit of a scam by the HMRC to me.