TC06659

Appeal number:  TC/2018/00918

CONSTRUCTION INDUSTRY SCHEME – late return – amounts paid on time – whether reasonable excuse - no

FIRST-TIER TRIBUNAL

TAX CHAMBER

The Tribunal determined the appeal on 27 June 2018 without a hearing under the provisions of Rule 26 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (default paper cases) having first read the Notice of Appeal dated 31 January 2018 (with enclosures),  HMRC’s Statement of Case (with enclosures) acknowledged by the Tribunal on 16 March 2018.

© CROWN COPYRIGHT 2018

DECISION

1.              This is an appeal against a penalty of £100 for late filing of a Contractor’s Monthly return (CIS300) required under the Construction Industry Scheme for the period ended 5 October 2017.

2.              Regulation 4 of the Income Tax (CIS) Regulations 2005 requires that a return under the Construction Industry Scheme (CIS) rules must be made to HMRC in an approved form no later than 14 days after the end of each tax month. A tax month runs from the 6^th of one month to the 5^th of the following month and so a return is due by the 19^th of each month.

3.              The filing deadline for the return for the period ended 5 October 2017 was therefore 19 October 2017. It is not disputed that the return was filed online on 20 October 2017.

Appellant’s submissions

4.              In his grounds of appeal, the appellant (Mr Weir) stated that he uses SAGE payroll software which generates a CIS report each month when he sends PAYE information to HMRC. He confirms in his grounds of appeal that the relevant return was sent on 20 October 2017 at 12:39.

5.              Mr Weir states that the amount due was £367.52, but that he had paid £694.20 in error and so had overpaid £326.68.

6.              He explains that he does not “understand the problem with this as it was paid, sent and a receipt issued on time”.

7.              Mr Weir’s earlier appeal to HMRC, on 20 December 2017, gives an alternative ground for appeal, that the return was a nil return.

HMRC submissions

8.              HMRC, in summary, submit that:

(1)          It is Mr Weir’s responsibility, as a contractor within CIS, to ensure that the Regulations are followed.

(2)          Mr Weir registered for CIS on 31 October 2016 and has been filing returns since then; some of these returns have been filed late. When he registered for CIS, he received a contractor pack with all the relevant information required to operate CIS, including filing deadlines and penalty charges together with the CIS Helpline phone number.

(3)          A letter was also sent to Mr Weir on 10 February 2017 confirming that monthly returns should be sent by the 19^th of each month.

(4)          The return for the period ended 5 October 2017 was not a nil return, as stated in Mr Weir’s original appeal to HMRC and this is demonstrated in his grounds of appeal.

9.              HMRC consider that there is no reasonable excuse presented for the late filing. They have considered whether there are any special circumstances which would allow a reduction of the penalty and have concluded that there are no such special circumstances in this case.

Discussion

10.           It is agreed that the return for the period ended 5 October 2017 was filed on 20 October 2017, as Mr Weir has confirmed this in his grounds of appeal. The return was therefore filed late.

11.           Mr Weir’s grounds of appeal also state that the return “was … sent … ontime (sic)”. I have taken it, therefore, that he is appealing on the basis that the return was not late. Mr Weir does not say why he considers that the return was sent on time given that he states that it was sent on 20 October 2017.

12.           I have taken Mr Weir’s earlier grounds of appeal to HMRC, that the return was a nil return, to be an error as Mr Weir’s appeal to this tribunal makes it clear that the return was not a nil return.

13.           It is clear from the legislation and from HMRC material sent to Mr Weir and also publicly available that the deadline for filing a CIS monthly return is the 19^th of the month and not the 20^th of the month (or, indeed, later than the 20^th).

14.           I find, therefore, that Mr Weir has misunderstood the deadline for filing the return. The penalty will apply unless he can be said to have a reasonable excuse for that misunderstanding which led to the late filing. No explanation has been given for his statement that the return was filed on time on 20 October 2017 and so Mr Weir cannot be said to have a reasonable excuse for the late filing of the return.

Decision

15.           The appeal is dismissed and the penalty of £100 confirmed.

16.           This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009.   The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

ANNE FAIRPO

TRIBUNAL JUDGE

RELEASE DATE: 9 August 2018