CISR90080 - View Customer and Record Contact: Penalty Inhibitions
General
Having followed the steps listed at CISR90020 to gain entry to view a contractor scheme and then selected View Customer from the Main Menu, the next window visible will be the ‘Scheme Details’ window. From this window you should select the ‘Inhibitions’ tab at the top of the window.
Penalty Inhibitions
The setting of a penalty inhibition signal will prevent the issue of all new late return filing penalties for the penalty dates inhibited. The penalty will still be created by the CIS system but will remain unissued and given a status of ‘withheld’ as long as the inhibition exists. An inhibition signal can therefore only be set in respect of a penalty that has not yet been issued.
The penalty inhibition is set against an individual return and a penalty date relating to that return. For the period prior to 6th October 2011, a CIS monthly return (CIS300) could have (potentially) 13 separate penalty dates (see CISR65040). From 6th October 2011, the CIS300 will have a maximum of only four penalty dates (see CISR65050) for which penalty inhibitions may be set. It is possible to set inhibitions against more than one return and more than one penalty date at the same time.
When viewing penalty inhibitions for the tax year 2011/12, from 6th October 2011 you could potentially see penalty dates for penalties issued under both TMA70/S98A and FA09/SCH55 depending on which return you are viewing the penalty inhibitions for. For example;
- when viewing penalty inhibitions for returns up to and including 5th October 2011, you will see all thirteen penalty instances displayed even though no further CIS penalties under TMA70/S98A will be issued after 28th October 2011,
- when viewing penalty inhibitions for returns from 5th November 2011, these will show only four penalty dates and will have the new penalty descriptions as follows;
| Penalty Type | Penalty Reference |
|---|---|
| First fixed penalty | FP1 |
| Second fixed penalty | FP2 |
| First tax geared penalty | TGP1 |
| Second tax geared penalty | TGP2 |
You should refer to CISR65090 for more in-depth information on Penalty Inhibitions.
Capping period history
Where ‘Capping’ applies to the contractor a ‘capping period history’ will be displayed, and will show where a ‘capping’ period has been set on the record for periods on or after 6th October 2011. The entries to be shown under this title bar and what they mean, are as follows;
Effective date
This is the date that the scheme was registered for CIS. Where that occurred on or before 5th October 2011 then the date shown will be 6th October 2011.
Capping period start date
This is the date that the contractor first had an obligation to file a CIS monthly return or 6th October 2011 (whichever date is the later).
Capping period end date
The capping end date will be set once the first CIS monthly return has been logged, and the end date for the capping period will be the 5th of the month following the receipt of the first CIS monthly return. CIS fixed penalties FP1 and FP2 will then be capped to a maximum of £3000 in respect of returns due to be filed between the start and end date of the ‘capping’ period.
Reason for change
The options that will show here are as follows;
- Deemed start date
- New Registration
- Return Re-allocation
- Scheme Update
- MM YYYY Return
Deemed start date - this will always be 6th October 2011 and will be for existing cases registered prior to this date but who have yet to file their first CIS monthly return.
New Registration - this will show for any new contractor registering for CIS on or after 6th October 2011.
Return Re-allocation - will be shown where the only ‘effective’ or ‘concluded’ return captured is removed from the contractor scheme resulting in the removal of the capping period set on the scheme.
Scheme Update - This will be where the scheme type has been changed on EBS, for example from ‘P’ (employees only) to ‘PSC’ (employees and subcontractors)
MM YYYY Return - this will be the month and year of the first CIS Monthly return received which has then created the capping period end date.
The capping period history information remains visible as part of the three penalty inhibitions windows (described below) you happen to be in at the time.
Penalty Inhibitions Summary window
Selecting the ‘Inhibitions’ tab will take you to the first of three ‘Penalty Inhibitions’ windows.
In the Penalty Inhibitions summary window the top panel lists the scheme name and Accounts Office reference, the middle panel will show you the ‘Capping period history’ (see above), and the lower panel, titled ‘Tax Year Inhibition Summary’, provides a summary of the total number of penalties inhibited and the number of inhibitions set in each tax year for that scheme.
If the figure of inhibitions set is higher than the figure of penalties inhibited in each tax year, it will be because some of the penalties that are inhibited will not yet have been created as an inhibition can be set against a return up to six months into the future. However, this figure will reduce each time a penalty date is reached and by the end of the year the two figures will match.
If you wish to view a penalty inhibition that has been set against a penalty date in one of the tax years listed, you should select anywhere in the line of the required ‘tax year ending’ and you will be taken to the ‘Tax Year Summary’ window.
Tax Year Summary window
From this window you will be able to view;
- Details of the total number of penalties inhibited and set against each particular return period. If you then wish to view details of the number of, and reasons for, the inhibitions set against any of the filing dates for a return in that year, you should select anywhere on the required ‘Return Period Ending’ row. You will then be taken to the ‘Penalty Inhibitions for Return Period’ window.
- Whether the contractor scheme is ‘Inactive’ for the return period shown. A contractor can request inactivity in CIS for a period of six months when they no longer make payments to subcontractors. The CIS system will not issue any further returns during the inactive period. See CISR67000 for further information on Inactivity.
Penalty Inhibitions for Return Period window
The next window visible is titled ‘Penalty Inhibitions for Return Period’ and provides the following details for the return requested
- Filing date: The filing dates missed for the particular return being viewed. (The completed monthly return must be received by HMRC by the 19t h of the month in which the return period ended). If you requested details relating to the return period 05/12/2010, the 1st filing date shown will be (19/12/2010), 2nd (19/01/2011), 3rd (19/02/2011) and so on. For a return from the month ended 05/11/2011 the entries shown under filing date will be FP1, FP2, TGP1 and TGP2 (see above) along with the four penalty dates attached to that particular return.
- Inhibition set: An entry of Yes will be shown if an inhibition has been set, otherwise it will be blank.
- Inhibition Reason: An inhibition can be set for any of the following reasons
- Customer complaint
- Mediated complaint
- Reasonable excuse - illness
- Reasonable excuse - bereavement
- Reasonable excuse - IT failure
- Reasonable excuse - operational
- Reasonable excuse - other
- Appeal Determined - return not required
- HMRC administrative error
- Penalty appeal received
- Compliance intervention
- Insolvency
- Other
The guidance at CISR81020 gives an overview of what you may or may not accept as a reasonable excuse. You should remember that each case must be considered on its own merits, and that whether a person has a reasonable excuse will depend upon the particular circumstances which prevented the completion and submission of the return by the due date, as well as the particular circumstances and abilities of the person who has failed in their obligations.
- Reviewed - If an entry of ‘YES’ is shown here the penalty administrator will have examined the case and considered that the penalty is unlikely ever to be taken. This could be because the date of registration was captured incorrectly or the penalty due has been charged manually by a compliance team as part of a contract settlement. This indicator can however be removed at a later date if it is then decided that the penalty should be issued.
- Penalty status - Where an inhibition has already been set against a filing period the status of the penalty shown will be one of the following;
- Issued - where the penalty has been issued before the inhibition had been set
- Re-Issued - where the penalty has been re-issued before the inhibition had been set
- Vacated - where the penalty has been vacated since the inhibition had been set
- Withheld - where the contractor is deceased
- Withheld - where the contractor is insolvent
- Withheld - where a penalty inhibition has been set against that penalty date
- Withheld - where the capping limit of £3000 for fixed penalties FP1 and FP2 has been reached